20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .

For the transition period from                       to                        

Commission file number: 001-35157

Jiayuan.com International Ltd.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

15/F, Anhua Development Building

No. 35 Anding Road

Chaoyang District, Beijing

The People’s Republic of China

(Address of principal executive offices)

Shang-Hsiu Koo

Chief Financial Officer

Jiayuan.com International Ltd.

15/F, Anhua Development Building

No. 35 Anding Road

Chaoyang District, Beijing

The People’s Republic of China

Telephone: 86-10-6113-6600

Email: skoo@jiayuan.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
American Depositary Shares, or ADSs, every two ADSs representing three ordinary shares, par value US$0.001 per share	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)
Ordinary shares, par value US$0.001 per share	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)*

*              Not for trading, but only in connection with the listing on the Nasdaq Global Select Market of the American Depositary Shares

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

49,930,944 ordinary shares, par value US$0.001 per share as of

December 31, 2014

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes   x No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o Yes   x No

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes   o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer x Non-accelerated filer o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP x International Financial Reporting Standards as issued
by the International Accounting Standards Board o Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

o Item 17   o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes   x No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

o Yes   o No

TABLE OF CONTENTS

INTRODUCTION		1
FORWARD-LOOKING STATEMENTS		2
PART I		2
Item 1.	Identity of Directors, Senior Management and Advisers	2
Item 2.	Offer Statistics and Expected Timetable	2
Item 3.	Key Information	3
Item 4.	Information on the Company	34
Item 4A.	Unresolved Staff Comments	56
Item 5.	Operating and Financial Review and Prospects	56
Item 6.	Directors, Senior Management and Employees	76
Item 7.	Major Shareholders and Related Party Transactions	83
Item 8.	Financial Information	85
Item 9.	The Offering and Listing	85
Item 10.	Additional Information	86
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	93
Item 12.	Description of Securities Other than Equity Securities	94
PART II		95
Item 13.	Defaults, Dividend Arrearages and Delinquencies	95
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	95
Item 15.	Controls and Procedures	96
Item 16A.	Audit Committee Financial Expert	97
Item 16B.	Code of Ethics	97
Item 16C.	Principal Accountant Fees and Services	97
Item 16D.	Exemptions from the Listing Standards for Audit Committees	98
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	98
Item 16F.	Change in Registrant’s Certifying Accountant	99
Item 16G.	Corporate Governance	99
Item 16H.	Mine Safety Disclosure	99
PART III		99
Item 17.	Financial Statements	99
Item 18.	Financial Statements	99
Item 19.	Exhibits	99

INTRODUCTION

Unless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:

·“we,” “us,” “our company,” “our” and “Jiayuan” refer to Jiayuan.com International Ltd., and, unless the context requires otherwise, its subsidiaries, Shanghai Huaqianshu Information Technology Co., Ltd., Beijing Huaqianshu Information Technology Co., Ltd., Beijing Shiji Xique Information Technology Co., Ltd., Beijing Aizhenxin Information Technology Co., Ltd. and Shanghai Shiji Jiayuan Matchmaking Service Center;

·“our PRC companies” refers to our PRC subsidiaries and our PRC operating companies;

·“our PRC operating companies” refers to Shanghai Huaqianshu Information Technology Co., Ltd., Beijing Huaqianshu Information Technology Co., Ltd., Beijing Aizhenxin Information Technology Co., Ltd. and Beijing Shiji Xique Information Technology Co., Ltd.;

·“our PRC subsidiaries” refers to Miyuan (Shanghai) Information Technology Co., Ltd. and Beijing Miyuan Information Technology Co., Ltd.;

·“China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau;

·“shares” refers to our ordinary shares, par value US$0.001 per share;

·“preferred shares” or “Series A preferred shares” refers to our Series A convertible and redeemable preferred shares, par value US$0.001 per share, all of which were automatically converted into ordinary shares upon the completion of our initial public offering in May 2011;

·“ADRs” refers to the American depositary receipts, which, if issued, evidence our ADSs;

·“ADSs” refers to our American depositary shares, every two of which represent three ordinary shares;

·“platforms” refers to our Jiayuan.com website, izhenxin.com website, juedui100.com website, imdali.com website Jiayuan.com and qiuai.com wireless application protocol, or WAP, platforms, our Jiayuan.com, izhenxin.com, qiuyuehui, qiuai.com and imdali.com wireless applications and our Jiayuan.com desktop client; we introduced our Jiayuan.com wireless application protocol platform in 2010, our Jiayuan.com wireless application in 2011, our Jiayuan.com desktop client in January 2012, our izhenxin.com website in October 2012, our juedui100.com website in December 2012, our qiuai.com WAP platform in September 2013, both our imdali.com website and our imdali.com wireless application in November 2013 and our izhenxin.com wireless application in May 2014, respectively;

·“registered users” refers to users who have completed the registration process on one of our platforms;

·“registered user accounts” refers to accounts set up by registered users, including registered users who may have set up more than one account;

·“active user accounts” refers to registered user accounts through which registered users have logged-in to one of our platforms at least once within a calendar month in the case of user accounts registered in prior months, or on at least two separate days within a calendar month, including the day of completion of the registration process, in the case of user accounts newly registered in the calendar month;

·“paying user accounts” refers to registered user accounts through which registered users have paid for at least a single message fee or periodic subscription fee or purchased a value-added service within a calendar month;

·“personalized matchmaking services” refers to services which we previously referred to as VIP services;

·“RMB” or “Renminbi” refer to the legal currency of China; and

·“$,” “dollars,” “US$” or “U.S. dollars” refer to the legal currency of the United States.

This annual report on Form 20-F includes our audited consolidated statements of comprehensive income for the fiscal years ended December 31, 2012, 2013 and 2014 and audited consolidated balance sheet data as of December 31, 2013 and 2014.

We completed our initial public offering of 7,100,000 ADSs, every two ADSs representing three ordinary shares, on May 16, 2011. Our ADSs were listed on the NASDAQ Global Select Market under the symbol “DATE” on May 11, 2011.

1

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. All statements other than statements of historical fact in this annual report are forward-looking statements. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “will,” or other similar expressions. The forward-looking statements included in this annual report relate to, among others:

·our future business development, financial condition and results of operations;

·our ability to maintain and strengthen our position as the leading provider of online dating services in China;

·our ability to develop and commercialize additional online dating services;

·market acceptance of our online dating services;

·our various initiatives to implement our business strategies to expand our business;

·competition from other online dating service providers and operators;

·the expected growth of and change in the online dating services industry in China;

·our ability to effectively protect our intellectual property rights and not infringe on the intellectual property rights of others; and

·the PRC laws, regulations and policies relating to the Internet and Internet content providers, including online dating service providers and operators.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Item 3.D Key Information — Risk Factors” and other sections in this annual report.

The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

This annual report also contains statistical data and estimates that we obtained from industry publications and reports generated by third-party market research firms, including a report for the purpose of providing various industry and other information and illustrating our position in the online dating industry in China prepared by iResearch at our request and commissioned by us for the purposes of our annual report, and publicly available data. Although we believe that the publications, reports and surveys are reliable, we have not independently verified the data.

PART I

Item 1.           Identity of Directors, Senior Management and Advisors.

Not applicable.

Item 2.           Offer Statistics and Expected Timetable.

Not applicable.

2

Item 3.           Key Information.

A.Selected financial data

Selected Consolidated Financial Data

The following selected consolidated statements of comprehensive income data for the years ended December 31, 2012, 2013 and 2014, and the selected consolidated balance sheet data as of December 31, 2013 and 2014 have been derived from our audited consolidated financial statements included elsewhere in this annual report on Form 20-F. Our selected consolidated statements of comprehensive income data for the year ended December 31, 2010 and 2011, and the selected consolidated balance sheet data as of December 31, 2010, 2011 and 2012 were derived from our audited consolidated financial statements, which are not included in this annual report on Form 20-F. You should read the selected consolidated financial data in conjunction with our audited financial statements and the accompanying notes included elsewhere in this annual report on Form 20-F and “Item 5. Operating and Financial Review and Prospects.” Our audited consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our historical results are not necessarily indicative of our future results.

	For the year ended December 31,
	2010		2011		2012		2013		2014		2014
	RMB		RMB		RMB		RMB		RMB		US$
	(in thousands, except share, per share and per ADS data)
Consolidated Statement of Comprehensive Income Data:
Net revenues	167,589		331,241		410,803		492,606		613,990		98,957
Cost of revenues (1)	(61,049	)	(104,814	)	(143,685	)	(180,521	)	(277,789	)	(44,772	)
Gross profit	106,540		226,427		267,118		312,085		336,201		54,185
Operating expenses:
Selling and marketing expenses (1)	(57,867	)	(110,521	)	(143,376	)	(183,619	)	(252,736	)	(40,734	)
General and administrative expenses (1)	(24,338	)	(64,310	)	(54,367	)	(52,565	)	(58,071	)	(9,359	)
Research and development expenses (1)	(381	)	(11,796	)	(17,587	)	(21,918	)	(23,149	)	(3,731	)
Total operating expenses	(82,586	)	(186,627	)	(215,330	)	(258,102	)	(333,956	)	(53,824	)
Operating income	23,954		39,800		51,788		53,983		2,245		361
Interest income, net	1,876		5,077		13,323		11,687		17,658		2,846
Foreign currency exchange income/(loss), net	—		8,911		(1,845	)	1,935		(1,361	)	(219	)
Other income, net	898		1,562		4,898		9,104		4,572		737
Income before income tax	26,728		55,350		68,164		76,709		23,114		3,725
Income tax expenses	(10,011	)	(18,107	)	(9,227	)	(13,053	)	(3,007	)	(485	)
Net income attributable to Jiayuan.com International Ltd.	16,717		37,243		58,937		63,656		20,107		3,240
Accretion of Series A redeemable convertible preferred shares	(8,690	)	(3,222	)	—		—		—		—
Income allocated to participating preferred shares	(16,717	)	(12,681	)	—		—		—		—
Net (loss)/income attributable to ordinary shareholders	(8,690	)	21,340		58,937		63,656		20,107		3,240
Net income attributable to Jiayuan.com International Ltd.	16,717		37,243		58,937		63,656		20,107		3,240
Other comprehensive income:
Foreign currency translation adjustments, net of tax of RMB nil	2,825		(11,452	)	(772	)	(9,018	)	1,780		287
Comprehensive income attributable to Jiayuan.com International Ltd.	19,542		25,791		58,165		54,638		21,887		3,527
Net (loss)/income per share:
Basic	(0.32	)	0.54		1.27		1.42		0.45		0.07
Diluted	(0.32	)	0.50		1.23		1.39		0.44		0.07
Weighted average shares used in calculating net (loss)/income per share, basic	27,272,727		39,647,790		46,297,314		44,910,676		44,423,885		44,423,885
Weighted average shares used in calculating net (loss)/income per share, diluted	27,272,727		42,384,833		47,743,098		45,827,922		45,390,809		45,390,809
Net (loss)/income per ADS (2):
Basic	(0.48	)	0.81		1.91		2.13		0.68		0.11
Diluted	(0.48	)	0.76		1.85		2.08		0.66		0.11
ADSs used in computing net (loss)/income per ADS, basic	18,181,818		26,431,860		30,864,876		29,940,450		29,615,923		29,615,923
ADSs used in computing net (loss)/income per ADS, diluted	18,181,818		28,256,555		31,828,732		30,551,948		30,260,539		30,260,539

3

(1)   Includes share-based compensation expenses as follow:

	For the year ended December 31,
	2010	2011	2012	2013	2014	2014
	RMB	RMB	RMB	RMB	RMB	US$
	(in thousands)
Cost of revenues	2,041	2,624	3,380	1,737	1,964	317
Selling and marketing expenses	700	796	807	371	572	92
General and administrative expenses	4,174	25,726	7,355	7,627	6,308	1,017
Research and development expenses	48	1,396	1,821	693	760	122
Total	6,963	30,542	13,363	10,428	9,604	1,548

(2)Basic and diluted net (loss)/income per ADS is computed based on net (loss)/income attributable to ordinary shareholders and the corresponding basic and diluted number of ADSs, assuming that, during each period presented, every two ADSs represents three ordinary shares.

	As of December 31,
	2010		2011	2012	2013	2014	2014
	RMB		RMB	RMB	RMB	RMB	US$
	(in thousands, except share data)
Consolidated Balance Sheet Data:
Total current assets	149,229		618,106	593,037	635,455	565,266	91,105
Total assets	164,258		655,705	695,066	740,003	673,446	108,540
Total liabilities	85,572		122,188	147,680	200,785	286,406	46,160
Series A redeemable convertible preferred shares	93,559		—	—	—	—	—
Total shareholders’ (deficit)/equity	(14,873	)	533,517	547,386	539,218	387,040	62,380
Number of outstanding ordinary shares	27,272,727		47,489,394	48,130,944	49,030,944	49,930,944	49,930,944

Selected Non-GAAP Consolidated Financial Data

We define non-GAAP net income as net income attributable to Jiayuan.com International Ltd. excluding share-based compensation expenses. We review non-GAAP net income together with net income attributable to Jiayuan.com International Ltd. to obtain an additional understanding of our operating performance. We also believe it is useful supplemental information for investors and analysts to assess our operating performance without the effect of non-cash share-based compensation expenses, which have been and will continue to be significant recurring expenses in our business. However, the use of non-GAAP net income has material limitations as an analytical tool. One of the limitations of using non-GAAP net income is that it does not include all items that impact our net income attributable to Jiayuan.com International Ltd. during the periods. In addition, because non-GAAP net income is not calculated in the same manner by all companies, it may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP net income in isolation from or as an alternative to net income attributable to Jiayuan.com International Ltd. prepared in accordance with U.S. GAAP. Our non-GAAP net income is calculated as follows for the periods presented:

	For the year ended December 31,
	2010	2011	2012	2013	2014	2014
	RMB	RMB	RMB	RMB	RMB	US$
	(in thousands)
Net income attributable to Jiayuan.com International Ltd.	16,717	37,243	58,937	63,656	20,107	3,240
Add: Share-based compensation expenses	6,963	30,542	13,363	10,428	9,604	1,548
Non-GAAP net income	23,680	67,785	72,300	74,084	29,711	4,788

4

Exchange Rate Information

Our business is primarily conducted in China and a substantial majority of our revenues are denominated in Renminbi. The exchange rate refers to the exchange rate as set forth in the H.10 statistical release of the Federal Reserve Board. Unless otherwise indicated, conversions of RMB into U.S. dollars in this annual report are based on the exchange rate, as of December 31, 2014, which was RMB6.2046 to $1.00. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all. The PRC government imposes controls over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign exchange and through restrictions on foreign trade.

The following table sets forth information concerning exchange rates between the Renminbi and the U.S. dollar for the periods indicated.

	Renminbi per U.S. Dollar Noon Buying Rate
Period	Average (1)	High	Low	Period-End
2010	6.7603	6.6000	6.8330	6.6000
2011	6.4630	6.2939	6.6364	6.2939
2012	6.2990	6.2221	6.3879	6.2301
2013	6.1412	6.0537	6.2438	6.0537
2014	6.1704	6.0402	6.2591	6.2046
Previous Six Months
October 2014	6.1251	6.1107	6.1385	6.1124
November 2014	6.1249	6.1117	6.1429	6.1429
December 2014	6.1886	6.1490	6.2256	6.2046
January 2015	6.2181	6.1870	6.2535	6.2495
February 2015	6.2518	6.2399	6.2695	6.2695
March 2015	6.2386	6.1955	6.2741	6.1990
April 2015 (through April 10)	6.1989	6.1930	6.2082	6.2082

(1) Annual averages are calculated by averaging the exchange rates on the last business day of each month.  Monthly averages are calculated using the average of the daily rates during the relevant period.

On April 10, 2015, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board was RMB6.2082 to $1.00.

B.                    Capitalization and indebtedness

Not applicable.

C.                    Reasons for the offer and use of proceeds

Not applicable.

D.                    Risk factors

Risks Relating to Our Business

Our limited operating history and relatively new business model in an emerging and rapidly evolving market make it difficult to evaluate our future prospects.

Our online dating business commenced in 2003.  We began charging our users message fees on our online dating platform in October 2008.  Prior to this, we generated revenues primarily from charging for non-message related value-added services, such as VIP memberships, priority search rankings and from selling advertisement space on our platform.  Accordingly, we have a limited relevant operating history from which to evaluate our business, financial performance and prospects.  Since the change in our business model in 2008, we have derived a substantial portion of our net revenues from service fees generated from online dating services.  Our online services revenue represented 88.2%, 85.7% and 69.3% of our net revenues in 2012, 2013 and 2014, respectively.  In 2013, we began offering personalized matchmaking services in cooperation with matchmaking agencies under an outsourcing model in China and we had 71 locations offering personalized matchmaking services through such arrangements in China as of December 31, 2014.  As a result, we have a short operating history under our current revenue model for you to evaluate in assessing our future prospects.  We may not be able to achieve similar results or growth in future periods.  Our business model may become obsolete due to development of other business models or technologies.  You must consider our business and prospects in light of the risks and difficulties we will encounter as a young company in a new and rapidly evolving market.  Our ability to maintain profitability primarily depends on, among other factors, the growth of the online dating industry in China, the continued acceptance of our business model by our users, our ability to generate continuing interest in our platform, our ability to provide services that meet the needs of our users and our ability to control costs and expenses.  Accordingly, you should not rely on our results of operations for any prior period as an indication of our future performance.  We may not be able to effectively assess or address the evolving risks and difficulties present in the market, which could threaten our capacity to continue operations successfully in the future.

5

If our efforts to attract a large number of users, convert users into paying users and retain paying users are not successful, our operating results would suffer.

Our future growth depends on our ability to attract a large number of users, convert our users into paying users and retain our paying users.  This depends in part on our ability to deliver a high-quality online dating experience to our users and our development and introduction of enhanced services to retain our paying users.  As a result, we must invest significant resources in order to enhance our existing services and continue to introduce new services that people will use.  If we are unable to predict user preferences or industry changes, or if we are unable to modify and enhance our services on a timely basis, we may lose user interest and fail to attract new and paying users.  Our operating results would also be adversely affected if our services are not responsive to the needs of our users and paying users.

Our selling and marketing expenses may increase and if efforts to increase traffic to our platform are not successful or cost-effective, our net revenues and profitability may be materially and adversely affected.

We rely on a variety of different marketing efforts to attract traffic to our platforms and convert users into paying users.  Our marketing activities involve considerable expenditures for online and traditional offline advertising and marketing.  Our online advertising is designed to direct traffic to our platforms and includes purchased listings on various major Internet search engines in China as well as advertising on third-party websites.  Purchased listings generally are displayed if searches for a particular word are performed on a search engine.  Advertising on third-party websites includes purchasing advertising space and links to one of our platforms.  In addition, we also advertise through wireless channels, including WAP portals, application download stores and in-app advertising.  Depending on the arrangement, we pay a fixed fee when visitors to these websites click through to one of our platforms, a fee based on the volume of clicks to our platforms or a fee based on the volume of successful registrations from visitors who click through to one of our platforms.  These arrangements generally are not exclusive.  Our offline advertising includes advertising in conventional media such as television stations and print media.  To enhance our market penetration, especially among working professionals, we also advertise in subway stations.

Our selling and marketing expenses vary over time, depending upon a number of factors, many of which are beyond our control.  For example, the cost of online advertising has recently increased substantially, and we expect those costs to continue to rise as long as the demand for online advertising remains robust.  If we are not able to reduce our other operating costs, increase our paying user base or increase average revenue per user to offset such anticipated increases, our profitability may be materially and adversely affected.  In addition, our marketing activities may not be successful or cost-effective.  Existing arrangements with third parties can be terminated or allowed to lapse upon their expiration and we may not be able to replace this traffic and the related revenues.  We also may not be able to enter into new arrangements with third parties in response to industry trends, which would adversely affect our business, financial condition and results of operations.

Marketing strategies in China are evolving.  This further requires us to enhance our marketing strategies and experiment with new marketing methods to keep pace with industry developments.  Failure to refine our existing marketing activities or to introduce new effective marketing activities in a cost-effective manner could reduce our market share, cause our net revenues to decline and negatively impact our profitability.

If one or more of our users suffers, or alleges to have suffered, physical, financial or emotional harm or our online dating services are misused by users, we may suffer damage to our reputation and our brand, which in turn could adversely affect our net revenues and cause the value of our ADSs to decline.

The nature of online dating is such that we cannot control the behavior of our users in their communications or physical interactions.  It is possible that one or more of our users could be physically, financially, emotionally or otherwise harmed following interaction with other users.  We warn our users to exercise caution in meetings they arrange following the use of our services or participation in our offline events, but if one or more of our users suffers or alleges to have suffered physical, financial, emotional or other harm following contact initiated on our online dating platforms or an online dating platform of one of our competitors, any resulting negative publicity or legal action could harm our reputation and business and may have an adverse effect on China’s online dating industry in general, potentially leading to, among other things, increased government scrutiny and regulation.  From time to time, we are subject to claims, which may include lawsuits, by users relating to incidents that have occurred after users meet each other.

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Users may also be able to circumvent the controls we have in place to prevent illegal or dishonest activities and behavior on our platforms, such as seeking payment for sexual activity and other activities that are inconsistent with our business purpose.  Users could also post fraudulent profiles or create false profiles on behalf of other non-consenting parties.

Any such incident involving our online dating services could damage our reputation and our brand.  This, in turn, could adversely affect our net revenues and could cause the value of our ADSs to decline.  In addition, the affected users could initiate legal or other actions against us, which could cause us to incur significant expenses and damage our reputation.

Negative press or public opinion about us, our management or users of our online dating platforms may result in harm to our brand and reputation, lead to government investigations and sanctions or have a material and adverse effect on our business.

We have been the subject of allegations in media reports and Internet forums.  In particular, some media reports and comments in Internet forums have alleged that users of our Jiayuan.com platform have been subjected to fraudulent and other illegal and dishonest activities carried out by other users of the platform.  Some of our users have also been alleged to use our Jiayuan.com online platform to seek casual, non-serious relationships and to also seek and provide sexual and other activities that are inconsistent with our business purpose.  Our Jiayuan.com platform has also been alleged to contain false profiles and erroneous user activity.  While we have controls in place in an effort to limit such activities, our business and our brand and reputation may be materially and adversely affected through the dissemination of rumors, whether substantiated or not, about our business and operations in media reports, online news sites, blogs, social networking sites or other Internet forums.  Negative press or any public allegation against us, our online dating platforms or our users, may materially and adversely harm our brand and our business. Such negative publicity or allegations, especially direct allegations against us, may also require us to engage in a defensive media campaign, which may result in an increase in our marketing expenses, divert our management’s attention and adversely impact our results of operations.  Government authorities may require us to restrict or discontinue the features and services provided by our online dating platforms. As a result, our business may suffer and our user base, revenues and profitability may be materially and adversely affected.

If we are unable to maintain and enhance our brands, we may be unable to maintain or expand our user base.

We believe that the reputation and level of market awareness for our “世纪佳缘” (Shiji Jiayuan) and “佳缘” (Jiayuan) brands have contributed significantly to the success of our business.  Maintaining and enhancing our brand recognition and reputation depends primarily on the quality and consistency of our services, as well as the success of our marketing and promotional efforts.  We believe that maintaining and enhancing our brand is critical to our efforts to attract and expand our user base.  We believe that the importance of brand recognition will continue to increase given the growing number of Internet sites and the low barriers to entry for companies to set up online dating services.  To attract and retain users, and to promote and maintain our brands in response to competitive pressures, we intend to increase our financial commitment to creating and maintaining distinct brand loyalty.  If visitors and users to our platforms do not perceive our existing services to be of high quality, or if we introduce new services that are not favorably received, the value of our brands could be diluted, thereby decreasing the attractiveness of our platforms.  While we have devoted significant resources to brand promotion efforts in recent years, we cannot assure you that our ongoing marketing efforts will be successful in further promoting our brand.  In addition, our brand image may be harmed by negative publicity relating to our company or platforms regardless of its veracity. If we are unable to further maintain and enhance our brand recognition and increase market awareness for our company and services, our ability to attract users may be harmed and our business prospects may be materially and adversely affected.

Competition presents an ongoing threat to the performance of our business and may make it difficult for us to attract and retain users.

The online dating sector in China is highly competitive.  The market is characterized by the frequent introduction of new websites and services, short website life cycles, constantly evolving trends, rapid adoption of technological advancements, as well as price-sensitive users.  We expect competition in the online dating business in China to continue to increase because there are no substantial barriers to setting up an online dating website.  We compete directly with online dating service providers such as Baihe.com, Zhenai.com and Youyuan.com.  We also compete with portals and classifieds websites that operate online dating sub-channels, such as 163.com, Ganji.com and 58.com.  In addition, we face competition from Internet portals and social networking websites such as Sina.com.cn, Sohu.com, QQ.com, Renren.com and Kaixin001.com, including applications on wireless devices from QQ.com, WeChat and Momo.  We also face competition and potential competition from overseas operators of online dating services and Internet companies that offer or seek to offer online dating services in China.

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In addition, we compete with traditional dating services, as well as newspapers, magazines and other traditional media companies that provide dating services.  We believe that our ability to compete successfully depends upon many factors both within and beyond our control, including the following:

·the size and diversity of our user base;

·the timing and market acceptance of our services, including the developments of and enhancements to those services relative to those offered by our competitors;

·customer service and support efforts;

·selling and marketing efforts; and

·our brand strength in the marketplace relative to our competitors.

Many of our current and potential competitors, including overseas companies that offer or seek to offer online dating services in China, have longer operating histories, significantly greater financial, technical, marketing and other resources and larger user bases than we do.  These factors may allow our competitors to respond more quickly than we can to new or emerging technologies and changes in user requirements.  These competitors may engage in more extensive technological development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies which may allow them to build larger user bases than we have.  Our competitors may develop products or services that are equal or superior to our services or that achieve greater market acceptance than our services.  These activities could attract users away from our platforms and reduce our market share.

In addition, current and potential competitors may make strategic acquisitions or establish cooperative and, in some cases, exclusive relationships with significant companies or competitors to expand their businesses or to offer more comprehensive services.  For example, an overseas operator of online dating services acquired a minority stake in one of our competitors based in the PRC.  To the extent these competitors or potential competitors establish exclusive relationships with major portals, search engines and Internet service providers, our ability to reach potential users may be restricted.  Any of these competitors could cause us difficulty in attracting and retaining users and could jeopardize our existing relationships with portals, search engines and other web properties.

If we fail to keep pace with rapid technological change, our competitive position will suffer.

We operate in a market characterized by rapidly changing technologies, evolving industry standards, new product and service announcements, product enhancements and changing user demands.  Accordingly, our performance will depend on our ability to adapt to these rapidly changing technologies and industry standards, and our ability to continually improve the speed, performance, features, ease of use and reliability of our services in response to both evolving demands of the marketplace and competitive services.  There may be occasions when we may not be as responsive as our competitors in adapting our services to changing industry standards and the needs of our users.  Our industry has been subject to constant innovation and competition.  Historically, new features may be introduced by one competitor, and if they are perceived as attractive to users, they are often copied later by others.  Over the past several years, such new feature introductions in the industry have included instant messaging, message boards, e-cards, virtual gifts, personality profiles, mobile content delivery and video dating.  In addition, the number of people who access the Internet through devices other than desktop and laptop computers, including mobile telephones, tablet computers and other handheld computing devices, has increased dramatically in the past few years, and we expect this growth to continue. Such growth can affect our results of operations as our cost of revenues increases in part due to such users paying for our services through telecommunication operators.  Payments through telecommunication operators result in an increase of the commissions that we pay to our WVAS partners because our WVAS partners charge a higher commission compared to online banking and online payment providers.

Introducing new technologies into our systems involves numerous technical challenges, substantial amounts of capital and personnel resources and often takes many months to complete.  For example, the lower resolution, functionality and memory currently associated with mobile devices may make the use of our services through such mobile devices more difficult and impair the user experience relative to access via desktop and laptop computers.  We intend to continue to devote resources to the development of additional technologies and services.  We may not be able to effectively integrate new technologies on a timely basis or at all, which may decrease user satisfaction with our online dating services.  Such technologies, even if integrated, may not function as expected or may be unable to attract and retain a substantial number of mobile device users to our online dating services.  We also may not be able to protect such technology from being used by our competitors.  Our failure to keep pace with rapid technological changes could have a material and adverse effect on our business.

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If we were to lose the services of our founder, Ms. Haiyan Gong, our business could be disrupted and our business prospects could be adversely affected.

Our founder, Ms. Haiyan Gong, has played an important role in the growth and development of our business since its inception.  To date, we have relied heavily on her expertise in our business operations, relationships with our employees and business partners and reputation in the online dating industry.  Although Ms. Gong resigned as our co-chief executive officer in December 2012 and as our non-executive co-chairman of our board of directors in March 2015, she continues to be involved in our company as a consultant.  If Ms. Gong becomes unable or unwilling to continue to be involved with our company, we may not be able to find a suitable replacement.  In addition, if she joins a competitor or forms a competing business, it could severely disrupt our business and negatively affect our financial condition and results of operations. Moreover, even if a complete separation of Ms. Gong from our company did not have any actual impact on our operations and the growth of our business, it could create the perception among investors or the marketplace that her departure may severely damage our business and operations and negatively affect investor confidence in us, which may cause the market price of our ADSs to decline.  We do not maintain key-person insurance on Ms. Gong.

If we are unable to attract, retain and motivate key personnel or hire qualified personnel, or if such personnel do not work well together, our growth prospects and profitability will be harmed.

Our performance is largely dependent on the talents and efforts of highly skilled individuals.  As certain members of management left in 2012, we have recently recruited several members of our management, some of whom have limited experience in the online dating industry.  As members of our management have only worked together as a team for a limited time, there are inherent risks in the management of our company with respect to decision-making, business direction, product development and strategic relationships.  In the event that the members of our management team are unable to work well together or agree on operating principles, business direction or business transactions or are unable to provide cohesive leadership, our business could be harmed and one or more of those individuals may discontinue their service to our company forcing us to find a suitable replacement.  The loss of any of our management or key personnel could seriously harm our business.

Competition in our industry for personnel is intense, and we are aware that our competitors have directly targeted our employees and that there are former employees of ours currently working for our competitors.  While we have entered into non-competition agreements with our executive officers and many of our non-executive employees, we cannot assure you that the non-competition restrictions in these agreements will be effective or enforceable under PRC law.  We also do not maintain key-person insurance policies on our executive officers.  The incentives to attract, retain and motivate employees provided by our option grants, restricted shares or by future arrangements, such as cash bonuses, may not be as effective as they have been in the past.  If we do not succeed in attracting necessary personnel or retaining and motivating existing personnel, we may be unable to grow effectively. In addition, if any of our management or employees joins a competitor or forms a competing company, we may lose know-how, clients and key professionals and staff members.

We have re-priced, and may continue to re-price, our outstanding stock options granted to our directors and employees, any of which may result in increased share-based compensation expenses.

In July 2012, in order to help retain key personnel under then-current market conditions, our board of directors approved the amendment of certain option awards granted under our 2007 Amended and Restated Share Incentive Plan. We cancelled and replaced the awards with awards that have a lower exercise price and fewer underlying shares. In October 2014, we adjusted the exercise price of our outstanding stock options in order to take into account the special cash dividend we declared in September 2014.  As the trading price of our ADSs fluctuates, we cannot assure you that we will not continue to reduce the exercise price of our outstanding options granted under the existing equity incentive plan or other equity incentive plans that may be adopted in the future. Should we reduce the exercise price of our outstanding options, our share-based compensation expenses may increase and our operating results may be adversely affected.

Our inability to effectively manage our growth could materially and adversely affect our profitability.

The growth and expansion of our business and services place a continuous significant strain on our management, operational and financial resources.  We are required to manage multiple relationships with various strategic associates, technology licensors, users and other third parties.  In the event of further growth of our operations or in the number of our third-party relationships, our computer systems or procedures may not be adequate to support our operations and our management may not be able to manage this growth effectively.  To effectively manage our growth, we must continue to implement and improve our operational, financial and management information systems and to expand, train and manage our employee base.  If we fail to do so, our management, operational and financial resources could be overstrained and adversely impacted.

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Our business depends on our server and network hardware and software and our ability to obtain network capacity; if our current systems safeguards are unable to prevent an interruption in the availability of our services, our reputation and brand may be adversely affected and our net revenue may be reduced.

The performance of our server and networking hardware and software infrastructure is critical to our business and reputation, to our ability to attract visitors and users to our platforms, to convert users into paying users and to retain paying users.  An unexpected or substantial increase in the use of our platforms could strain the capacity of our systems, which could lead to a slower response time or systems failures.  We have in the past experienced delays due to hacking activities.  Any future slowdowns or systems failures could adversely affect the speed and responsiveness of our platforms and would diminish the experience for our visitors and users.  We face risks related to our ability to scale up to our expected user levels while maintaining superior performance.  If the usage of our platforms substantially increases, we may need to purchase additional servers and networking equipment and services to maintain adequate data transmission speeds, the availability of which may be limited or the cost of which may be significant.  Any systems failure that causes an interruption in service or a decrease in the responsiveness of our platforms could reduce traffic on our platforms and, if sustained or repeated, could impair our reputation and the attractiveness of our brands as well as reduce net revenue and negatively impact our operating results.

Furthermore, we rely on many different hardware systems and software applications, some of which have been developed internally.  If these hardware systems or software applications fail, it would adversely affect our ability to provide our services.  If we are unable to protect our data from loss or electronic or magnetic corruption, or if we receive a significant unexpected increase in usage and are not able to rapidly expand our transaction-processing systems and network infrastructure without any systems interruptions, it could seriously harm our business and reputation.  We have experienced occasional systems interruptions in the past, and we cannot assure you that we will not experience similar or more serious interruptions in the future.  From time to time, our company and our platforms have been subject to delays and interruptions due to software viruses, or variants thereof, such as internet worms.  To date, we have not experienced delays or systems interruptions that have had a material impact on our business.

In addition, while we have backup systems in place, we do not have disaster recovery systems and in the event of a catastrophic failure involving our platforms, we may be unable to serve our web traffic for a significant period of time.  Our business is therefore susceptible to earthquakes and other catastrophic events, including acts of terrorism.  Our servers operate from two sites in close proximity to one another in Beijing and the absence of a redundant network in a different location could exacerbate this disruption.  Any systems failure, including network, software or hardware failure, that causes an interruption in the delivery of our platforms and services or a decrease in responsiveness of our platforms would result in reduced visitor traffic, reduced net revenue and would adversely affect our reputation and brands.

We rely on third-party advertising service providers and their failure or unwillingness to effectively provide services to us could harm us by increasing our costs and reducing our operating margins.

We rely on third-party advertising service providers, such as Baidu and Qihoo, that help market our services.  Any failure of these third parties to provide their services could significantly harm our business.  The steps we take to improve the marketing of our services will increase our cost and reduce our operating margins and may not be successful.  Furthermore, any financial or other difficulties these providers face, the nature and extent of which we cannot predict, may adversely affect our business.  Except for certain rights in our contracts with these third-party service providers, we exercise little or no control over them, which increases our vulnerability to problems with the services that they provide.

We are required to estimate a portion of our reported revenues and cost of revenues at period-end, which may require adjustments once we receive billing statements from WVAS partners, which may require subsequent adjustments to our financial statements.

We do not directly bill our users that elect to pay for our online services through their telecommunication operators.  Instead, we depend on wireless value-added services, or WVAS, partners, to record the sales volume, bill our users, collect payments from the Internet and telecommunication operators and remit to us our portion of the revenues.  In the years ended December 31, 2012, 2013 and 2014, revenue remitted from WVAS partners accounted for approximately 30.0%, 33.4% and 35.9%, respectively, of our online revenues.

Due to our past experience with the timing of receipt of the monthly statements provided by our WVAS partners, we rely on our own internal estimates for the portion of our reported revenues and cost of revenues attributable to our WVAS partners and are required to make adjustments when we actually receive the monthly billing statements from these partners if such statements are materially different from our estimates.  Historically, there have been no significant differences between our estimates and our WVAS partners’ billing statements.  To the extent that our WVAS partners require longer periods of time to send us monthly billing statements, we may not be able to make any adjustment prior to releasing our period-end results and we cannot assure you that any adjustment which we subsequently make would not be material.

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Furthermore, our WVAS partners collect user fees from telecommunication operators, such as China Mobile, China Unicom and China Telecom.  Our WVAS partners’ relationships with these telecommunication operators could in turn impact our business.  Any loss or deterioration of our WVAS partners’ relationships with telecommunication operators may affect our ability to collect fees from our users, which would have an adverse effect on our cash flows and any write-off of receivables would affect our results of operations.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.  As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm the value of our ADSs.

Effective internal controls are necessary for us to provide reasonable assurance with respect to our financial reports and to prevent fraud. We are required to comply with U.S. laws, rules and regulations on internal controls, including the Sarbanes-Oxley Act of 2002. In particular, Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting in our annual reports on Form 20-F that contains an assessment by our management of the effectiveness of our internal control over financial reporting. In addition, our independent registered public accounting firm must issue an auditor’s report on the effectiveness of our internal control over financial reporting.

Internal controls may not prevent or detect misstatements because of their inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. In addition, projections of any evaluation of the effectiveness of our internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in operating conditions or a deterioration in the degree of compliance with our policies or procedures. As a result, even effective internal controls are able to provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal control over financial reporting, our management may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may disagree. If our independent registered public accounting firm is not satisfied with our internal control over financial reporting or the level at which our controls are designed or operated, or if the independent registered public accounting firm interprets the requirements, rules or regulations differently from us, it may decline to express an opinion on the effectiveness of our internal control over financial reporting or may issue an adverse opinion. Any of these possible outcomes could result in a loss of investor confidence in the reliability of our consolidated financial statements, which could cause the market prices of our ADSs to decline significantly. In addition, any deficiency in our internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the Nasdaq Global Select Market, regulatory investigations and civil or criminal sanctions.

Future strategic alliances or acquisitions may have a material and adverse effect on our business, reputation and results of operations.

We have in the past and may in the future enter into strategic alliances with various third parties.  Strategic alliances with third parties could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the counterparty and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect our business.  We may have little ability to control or monitor their actions and to the extent strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with such third parties.

In addition, if we become aware of appropriate opportunities, we may acquire additional assets, technologies or businesses that are complementary to our existing business, such as our acquisition of certain assets of Beijing Juedui100 Network Technologies Ltd., or Beijing Juedui100, and our investment in Wuhan Didi Network Technologies Ltd., or Wuhan Didi.  Future acquisitions and the subsequent integration of new assets and businesses into our own would require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our business operations.  Acquired assets or businesses may not generate the financial results we expect.  In addition, acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the incurrence of debt, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business.  Moreover, the costs of identifying and consummating acquisitions may be significant.  In addition to possible shareholders’ approval, we may also have to obtain approvals and licenses from the government authorities in the PRC for the acquisitions and comply with applicable PRC laws and regulations, which could result in increased costs and delays.

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If we are unable to protect our Internet domain names or proprietary rights upon which our business relies or to avoid claims that we infringe upon the proprietary rights of others, our profitability may be materially and adversely affected.

We regard substantial elements of our platforms and the underlying technology as proprietary, and attempt to protect them by relying on copyright, service mark, trademark and trade secret laws as well as restrictions on disclosure, transferring title and other methods.  Contracts with our employees and consultants generally contain confidentiality provisions, and we generally seek to control access to and the distribution of our technology, documentation and other proprietary information.  We also enter into agreements with key employees and officers, pursuant to which our key employees and officers assign to us the intellectual property rights in works generated by them as a result of their employment duties or from our resources while they are employed by us.  Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary information without authorization, or to develop similar or superior technology independently.  Copyright, service mark, trademark and trade secret protection may not be effective and policing unauthorized use of our proprietary information is difficult.  In addition, if our applications for our key trademarks or other intellectual property rights are unsuccessful or a third party is able to register them, we may lose our ability to use our key trademarks and be unable to prevent others from using similar or identical trademarks.  Any such misappropriation or development of similar or superior technology by third parties could adversely impact our profitability and our future financial results. Losing the right to use our key trademarks or other proprietary rights for any reason may adversely affect our ability to maintain and protect our brands.

We believe that our platforms, services and other proprietary technologies do not infringe upon the rights of third parties.  However, there can be no assurance that our business activities do not and will not infringe upon the proprietary rights of others, or that other parties will not assert infringement claims against us.  From time to time and in the ordinary course of business, we have been, and expect to continue to be, subject to claims of alleged infringement of the copyrights, service marks and other intellectual property rights of third parties.  Although such claims have not resulted in any significant litigation or had a material adverse effect on our business to date, any such claims and resultant litigation might subject us to temporary injunctive restrictions on the use of our services or brand names and could result in significant liability for damages for intellectual property infringement, require us to enter into royalty agreements, or restrict us from using infringing software, services, trademarks or technologies in the future.  Even if not meritorious, such litigation could be time-consuming and expensive and could result in the diversion of management’s time and attention away from our day-to-day business.

We currently hold various domain names relating to our brands and in the future may acquire new web domain names.  The regulation of domain names in China and in foreign countries is subject to change.  Governing bodies may establish additional top level domains, appoint additional domain name registrars or modify the requirements for holding domain names.  As a result, we may be unable to acquire or maintain relevant domain names.  Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights are unclear.  We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our existing trademarks and other proprietary rights or those we may seek to acquire.  Any such inability to protect ourselves could cause us to lose a significant portion of our users to our competitors.

We may face potential liability, loss of users and damage to our reputation for any failure or alleged failure to protect the confidential information of our users.

Our user database holds confidential information concerning our users.  We may be unable to prevent third parties, such as hackers or criminal organizations, from stealing information provided by our users to us through our platforms.  Confidential information of our users may also be misappropriated or inadvertently disclosed through employee misconduct or mistake.  We may also in the future be required to disclose to government authorities certain confidential information concerning our users.

In addition, many of our users pay for our services through third-party online payment services.  In such transactions, maintaining complete security during the transmission of confidential information, such as personal information, is essential to maintaining consumer confidence.  We have limited influence over the security measures of third-party online payment service providers.  In addition, our third-party merchants may violate their confidentiality obligations and disclose information about our users.  Any compromise of our security or third-party service providers’ security could have a material adverse effect on our reputation, business, prospects, financial condition and results of operations.

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If we are accused of failing to protect the confidential information of our users, we may be forced to expend significant financial and managerial resources in defending against these accusations and we may face potential liability.  Any negative publicity may adversely affect our public image and reputation.  In order to strengthen our security protocols to protect user information, we may from time to time introduce increasingly more complex registration and log-in procedures, requiring users to input more information which may negatively impact our user acquisition and user retention. In addition, any perception by the public that online commerce is becoming increasingly unsafe or that the privacy of user information is vulnerable to attack could inhibit the growth of online services generally, which in turn may reduce the number of our users.

Our quarterly results may fluctuate because of a number of factors, including seasonality, and, as a result, investors should not rely on quarterly operating results as indicative of future results.

Fluctuations in operating results or the failure of operating results to meet the expectations of public market analysts and investors may negatively impact the value of our ADSs.  Quarterly operating results may fluctuate in the future due to a variety of factors that could affect net revenues or expenses in any particular quarter.  Fluctuations in quarterly operating results could cause the value of our ADSs to decline.  Investors should not rely on quarter-to-quarter comparisons of results of operations as an indication of future performance.  Factors that may affect our quarterly results include:

·the demand for, and acceptance of, our online dating services and enhancements to these services;

·the introduction, development, timing, competitive pricing and market acceptance of our platforms and services and those of our competitors;

·the magnitude and timing of marketing initiatives and capital expenditures relating to expansion of our operations;

·the cost and timing of online and offline advertising and other marketing efforts;

·the maintenance and development of relationships with portals, search engines, Internet service providers and other web properties and other entities capable of attracting potential and paying users to our platforms;

·technical difficulties, systems failures, systems security breaches, or downtime of the Internet, in general, or of our services, in particular;

·costs related to any acquisitions or dispositions of technologies or businesses; and

·general economic conditions, as well as those specific to the Internet, online dating and related industries.

In addition, we experience seasonality in our businesses.  We generally experience lower user traffic and acquire fewer new users for our online dating services and hold fewer offline events during winter and the major national holidays in China, such as the Chinese New Year holidays, which fall in January or February, and the National Day holidays, which fall in the beginning of October.

As a result of the foregoing factors and because the online dating business is still immature, making it difficult to predict consumer demand, it is possible that in future periods results of operations may be below the expectations of public market analysts and investors.  This could cause the market price of our ADSs to decline.

We have a history of net losses prior to 2009 and may experience earnings declines or losses in the future.

We incurred net losses in all periods prior to 2009.  We cannot assure you that we can sustain profitability or avoid net losses in the future.  Although we experienced revenue growth in recent periods, such growth rates may not be sustainable and may decrease in the future.  In addition, our ability to be profitable depends on our ability to control our costs and operating expenses, which we expect will increase as we expand our business.  We incurred in the past and expect to continue to incur in future periods certain share-based compensation expenses, which will reduce our net income and may result in future losses.  If we fail to increase net revenues at the rate we anticipate or if our costs and operating expenses increase without a commensurate increase in our net revenues, our business, financial condition and results of operations will be negatively affected.

We may need additional capital to finance our growth or to compete, which may cause dilution to existing shareholders or limit our flexibility in conducting our business activities.

We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including for working capital and capital expenditures, for at least the next 12 months.  We may need to raise additional capital in the future to fund expansion, whether in new vertical affinity or geographic markets, to develop newer or enhanced services, respond to competitive pressures or acquire complementary businesses, technologies or services.  Such additional financing may not be available on terms acceptable to us or at all.  To the extent that we raise additional capital by issuing equity securities, our shareholders may experience substantial dilution, and to the extent we engage in debt financing, if available, we may become subject to restrictive covenants that could limit our flexibility in conducting future business activities.  If additional financing is not available or not available on acceptable terms, we may not be able to fund our expansion, promote our brands, take advantage of acquisition opportunities, develop or enhance services or respond to competitive pressures.

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We have limited experience in cooperating with matchmaking agencies, and our efforts to expand our personalized matchmaking services across China through matchmaking agencies may not be successful and could impair the value of our brands and our results of operations.

We began offering our personalized matchmaking services in cooperation with matchmaking agencies under an outsourcing model beginning in May 2013 and we had 71 locations offering personalized matchmaking services through such arrangements in China as of December 31, 2014.  Under these cooperation arrangements, we sign the service contracts with the personalized matchmaking clients and the clients also pay us directly while the services are provided by matchmaking agencies under our close supervision.  Prior to May 2013, we had no experience operating through such arrangements with matchmaking agencies, and we can provide no assurance that these arrangements will be successful. We expect to increase these types of arrangements to expand into less developed markets in China. The effect of such cooperation arrangements on our business and results of operations is uncertain and depends upon a variety of factors, including the demand for our services in new local markets and our ability to successfully identify and work with appropriate matchmaking agencies. The matchmaking agencies with whom we enter into such arrangements have certain flexibility in running their operations and their employees are not our employees. To the extent that the matchmaking agencies with whom we enter into such arrangements do not provide services in a manner consistent with our requirements regarding our brands and customer service standards, the value of our brands could suffer. Failure to protect the value of our brands or any other harmful acts or omissions from matchmaking agencies with whom we enter into such arrangements could adversely affect our results of operations and our reputation.  In addition, we also substantially rely on them to gauge market demand.

Furthermore, our arrangements with matchmaking agencies typically have a one-year term, and the matchmaking agencies with whom we enter into such arrangements may not be willing or able to renew their arrangements with us. If we are unable to renew such arrangements, our results of operations and financial condition may suffer.

We do not have insurance coverage and thus may incur substantial costs in the event of any business interruption, litigation or natural disaster.

As the insurance industry in China is still in an early stage of development, insurance companies in China currently offer limited business insurance products.  We do not have any business liability, loss of data or disruption insurance coverage for our operations in China.  Any business disruption, litigation or natural disaster might result in our incurring substantial costs and the diversion of our resources.

Potential intellectual property rights infringement claims against us may materially affect our business and results of operations.

We could face claims by others that we are improperly using intellectual property owned by them or otherwise infringing upon their rights in intellectual property, including using unlicensed software.  Although we take measures to ensure that we obtain licenses with respect to the intellectual property we use, we cannot assure you that we will not be subject to infringement claims, including due to our failure to obtain necessary licenses.  Irrespective of the validity or the successful assertion of such claims, we could incur costs in either defending or settling any intellectual property disputes alleging infringement and the defense of these claims would be both costly and time-consuming, and could significantly divert the efforts and resources of our management and technical personnel.  Furthermore, an adverse determination in any such litigation or proceedings to which we may become a party could cause us to pay monetary damages, seek licenses from third parties on unfavorable terms, pay ongoing royalties or be restricted by injunctions.  Any of these factors could prevent or restrict us from pursuing some or all of our business and materially adversely affect our business and results of operations.

Our efforts to capitalize upon opportunities to expand into new services may fail and could result in a loss of capital and other valuable resources.

One of our growth strategies is to expand into new services to increase our revenue base.  We intend to target identifiable groups of people who share common interests and the desire to meet other individuals with similar interests, backgrounds or traits.  We have also developed map-based search services and wireless applications which utilize location-based services to make it easier and more convenient for our users to find potential matches on our platforms.  In 2013, we began offering our personalized matchmaking services in cooperation with matchmaking agencies in China.  Our planned expansion into new services will occupy our management’s time and attention and will require us to invest significant capital resources.  The results of our expansion efforts into new services are unpredictable and there is no guarantee that our efforts will have a positive effect on our revenue base.  We face many risks associated with our planned expansion into new services, including but not limited to the following possibilities:

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·competition from pre-existing competitors with significantly stronger brand recognition in the markets we enter;

·our erroneous evaluations of the potential of such markets;

·diversion of capital and other valuable resources away from our core business;

·foregoing opportunities that are potentially more profitable; and

·weakening our current brands by over expansion into too many new markets.

We have a limited history of operating these new businesses, which makes predicting our future results of operations more difficult than it otherwise would be.  Therefore, our past results of operations should not be taken as indicative of our future performance.  Our ability to achieve satisfactory financial results in these new businesses is unproven.

Risks Relating to Our Industry

Our network is vulnerable to security breaches and inappropriate use by users, which could disrupt or deter future use of our services.

Concerns over the security of transactions conducted on the Internet and the privacy of users may inhibit the growth of the Internet and other online services generally, and online dating services like ours, in particular.  To date, we have not experienced any material breach of our security systems.  However, our failure to effectively prevent security breaches could significantly harm our business, reputation and results of operations and could expose us to lawsuits and sanctions by governmental authorities in the jurisdictions in which we operate, and by our users.  Anyone who is able to circumvent our security measures could misappropriate proprietary information, including the personal data of our users, and cause interruptions in our operations or damage our brand and reputation.  Such breach of our security measures could involve the disclosure of personal information and could expose us to a material risk of litigation, liability or governmental enforcement proceeding.  We cannot assure you that our financial systems and other technology resources are completely secure from security breaches or sabotage, and we have occasionally experienced security breaches and attempts at hacking.  We may be required to incur significant additional costs to protect against security breaches or to alleviate problems caused by such breaches.  Any well-publicized compromise of our security or the security of any other platform could deter people from using our services or the Internet to conduct transactions that involve transmitting confidential information or uploading personal information, which could have a detrimental impact on our potential user base.

Computer viruses may cause delays or other service interruptions and could damage our reputation, affect our ability to provide our services and adversely affect our revenues.  The inadvertent transmission of computer viruses could also expose us to a material risk of loss or litigation and possible liability.  Moreover, if a computer virus affecting our system were highly publicized, our reputation could be significantly damaged, resulting in the loss of current and future users and paying members.

Interruptions, delays or capacity problems on our computer and telecommunications infrastructure may have a material and adverse effect on our revenue.

Our services are dependent upon the use of the Internet and telephone and broadband communications to provide high-capacity data transmission without systems downtime.  There have been instances where regional and national telecommunications outages in China have caused us, and other Internet businesses, to experience systems interruptions, including the temporary cessation of corporate use of short messaging services provided by telecommunications carriers.  Any additional interruptions, delays or capacity problems experienced with telephone or broadband connections could adversely affect our ability to provide services to our customers.  The temporary or permanent loss of all, or a portion, of the telecommunications system could cause disruption to our business activities and result in a loss of revenue.  Additionally, the telecommunications industry in China is subject to strict regulatory control.  Changes in current regulations, which could affect our telecommunications providers, could disrupt or adversely affect the profitability of our business.

In addition, if any of our current agreements with telecommunications providers were terminated, we may not be able to replace any terminated agreements with equally beneficial agreements.  There can be no assurance that we will be able to renew any of our current agreements when they expire or, if we are able to do so, that such renewals will be available on acceptable terms.  We also do not know whether we will be able to enter into additional agreements or that any relationships, if entered into, will be on terms favorable to us.

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Our business depends, in part, on the stability of the Internet, and our ability to provide services to our users may be limited by outages, interruptions and diminished capacity in the Internet.

Our performance will depend, in part, on the continued stability of the Internet.  This includes maintenance of a reliable network backbone in China with the necessary speed, data capacity and security for providing reliable Internet services.  Internet infrastructure may be unable to support the demands placed on it if the number of Internet users continues to increase or if existing or future Internet users access the Internet more often or increase their bandwidth requirements.  In addition, viruses, worms and similar programs may harm the performance of the Internet.  We have no control over the third-party telecommunications, cable or other providers of access services to the Internet that our users rely upon.  There have been instances where regional and national telecommunications outages have caused us to experience service interruptions during which our users could not access our services. Any additional interruptions, delays or capacity problems experienced with any points of access between the Internet and our users could adversely affect our ability to provide services reliably to our users.  The temporary or permanent loss of all or a portion of our services on the Internet, the Internet infrastructure generally or our users’ ability to access the Internet could disrupt our business activities, harm our business reputation and result in a loss of revenue.  Additionally, the Internet, electronic communications and telecommunications industries are subject to national, provincial, municipal and foreign governmental regulation.  New laws and regulations governing such matters could be enacted or amendments may be made to existing regulations at any time that could adversely impact our services.  Any such new laws, regulations or amendments to existing regulations could disrupt or adversely affect the profitability of our business.

We may be liable as a result of information retrieved from or transmitted over the Internet.

We may be sued for defamation, negligence, copyright or trademark infringement, invasion of privacy or personal injury, or under other legal theories, relating to information that is published or made available through our platform and the other sites linked to it.  These types of claims have been brought, sometimes successfully, against online services in the past.  We also offer various messaging services, which may subject us to potential risks, such as liabilities or claims resulting from unsolicited messages, or spamming, lost or misdirected messages, security breaches, illegal or fraudulent use of personal information or interruptions or delays in the delivery of messages.  We do not have insurance coverage of these types of claims.  In addition, we could incur significant costs in investigating and defending such claims, even if we ultimately are not held liable.  If any of these events occurs, our revenues could be materially and adversely affected or we could incur significant additional expense, and the market price of our ADSs may decline.

Our business, financial condition and results of operations may be adversely affected by the downturn in the global or Chinese economy.

The global financial markets have experienced significant disruptions since 2008.  China’s economy has also faced challenges.  To the extent that there have been improvements in some areas, it is uncertain whether such recovery is sustainable. Since we derive substantially all of our net revenues from users in China, our business and prospects may be affected by economic conditions in China.  A slowdown in China’s economy may lead to a reduced amount of personal spending on online dating services, which could materially adversely affect our financial condition and results of operations.

Moreover, a slowdown in the global or Chinese economy or the recurrence of any financial disruptions may have a material and adverse impact on financings available to us.  The weakness in the economy could erode investors’ confidence, which constitutes the basis of the equity markets.  The recent turmoil in the financial markets may significantly restrict our ability to obtain financing in the capital markets or from financial institutions on commercially reasonable terms, or at all.  Although we are uncertain about the extent to which the recent global financial and economic crisis and slowdown of the Chinese economy may impact our business in the short term and long term, there is a risk that our business, results of operations and prospects will be materially adversely affected by the ongoing global economic downturn or the slowdown of the Chinese economy.

Risks Relating to Regulation of Our Business and to Our Structure

If the PRC government finds that the agreements that establish the structure for operating our China business do not comply with restrictions on foreign investment in the online dating services industry, the prohibitions on foreign investment in the online gaming industry and the prohibition on privately funded non-enterprise institutions from engaging in profit-making business operations, we could be subject to severe penalties, including discontinuation of our operations.

Under the Regulations for the Administration of Foreign-invested Telecommunications Enterprises, or the FITE Regulations, foreign ownership of companies that provide value-added telecommunication services, including online dating services, is limited to 50%.  Hence, foreign enterprises and wholly foreign-owned enterprises are currently not able to apply for the licenses required to operate online dating services in China.  In addition, foreign investors are prohibited from investing in online gaming industries under the Guidance Catalogue of Industries for Foreign Investment promulgated in 2015.  Since we are a Cayman Islands exempted company and therefore are a foreign enterprise under PRC law, neither we nor our PRC subsidiaries are eligible to hold a license to operate online dating services or online gaming businesses in China.  In order to comply with the foreign ownership restrictions and prohibitions, we operate our online dating businesses in China through Shanghai Huaqianshu Information Technology Co., Ltd., or Shanghai Huaqianshu, Beijing Huaqianshu Information Technology Co., Ltd., or Beijing Huaqianshu, Beijing Aizhenxin Information Technology Co., Ltd., or Beijing Aizhenxin, and Beijing Shiji Xique Information Technology Co., Ltd., or Xique, and our online gaming business through Shanghai Huaqianshu, each of which is wholly owned by individual shareholders all of whom are PRC citizens.  Our PRC operating companies hold the licenses and approvals that are required to operate our online dating businesses, Shanghai Huaqianshu holds the internet cultural operating license required to operate our online gaming business and Beijing Miyuan Information Technology Co., Ltd., or Beijing Miyuan, has entered into a series of contractual arrangements with our PRC operating companies, including Shanghai Huaqianshu, and/or their respective shareholders.   As a result of these contractual arrangements, we are considered the primary beneficiary of our PRC operating companies and their subsidiaries and consolidate the results of operations of our PRC operating companies and their subsidiaries in our financial statements.  For a description of these contractual arrangements, see “Item 4.  Information on the Company — C. Organizational Structure.”

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In July 2006, the Ministry of Information Industry, or MII, issued the Circular on Strengthening the Administration of Foreign Investment in Value-added Telecommunication Services, or the MII Circular 2006.  According to the MII Circular 2006, a domestic company that holds a telecommunications value-added services operation license is prohibited from leasing, transferring or selling the license to foreign investors in any form, and from providing any assistance, including providing resources, sites or facilities, to foreign investors that conduct value-added telecommunications business illegally in China, and any domain name or registered trademark used in value-added telecommunication business operations should be directly owned by the telecommunication business operator or its shareholders.  The MII Circular 2006 also provides that the operational site and facilities of a value-added telecom carrier must be within the scope prescribed by the operating licenses obtained by the carrier and must correspond to the value-added telecom services that the carrier has been approved to provide.  Value-added telecom carriers are also required to establish or improve measures to ensure network security.  As to the companies which have obtained the operating licenses for value-added telecom services, they are required to conduct a self-examination and self-correction according to the above requirements and report the results of such self-examination and self-correction to the provincial branches of the MII.  As some of the trademarks that we use in our operations are not owned by our PRC operating companies or their shareholders, we may be in violation of the provisions of the MII Circular 2006.  As a result, we may be subject to various penalties, including fines and the discontinuation of, or restrictions on, our operations.

In addition, in October 1998, the PRC State Council promulgated the Provisional Regulations for the Registration Administration of Privately Funded Non-enterprise Institutions, or the Privately Funded Non-enterprise Institutions Regulation. According to the Privately Funded Non-enterprise Institutions Regulation, privately funded non-enterprise institutions may not engage in profit-making business operations, and lawful income accrued from their activities can only be used for business operations prescribed by their articles of association.  We have established a privately funded non-enterprise entity under the supervision of the Shanghai Yangpu District Bureau of Civil Affairs, Shanghai Shiji Jiayuan Matchmaking Service Center, or Jiayuan Shanghai Center, whose business scope includes marriage agency services, through which we operate some of our personalized matchmaking services.  Jiayuan Shanghai Center has entered into a series of contractual arrangements with Beijing Miyuan pursuant to which Jiayuan Shanghai Center agreed to pay service fees equal to a certain percentage of Jiayuan Shanghai Center’s annual revenues to Beijing Miyuan in exchange for technology services from Beijing Miyuan.  See “Item 4. Information on the Company.  C. Organizational Structure.”

In September 2009, the General Administration of Press and Publication, Radio, Film and Television, or GAPPRFT (formerly known as the General Administration of Press and Publication or GAPP), promulgated the Circular Regarding the Implementation of the Department Reorganization Regulation by the State Council and the Relevant Interpretation by the State Commission Office for Public Sector Reform to Further Strengthen the Administration of Pre-approval on Online Games and Approval on Import Online Games, or the GAPP Circular, which provides that foreign investors shall not control or participate in PRC online gaming businesses indirectly or in a disguised manner such as by establishing joint venture companies or entering into relevant agreements with, or by providing technical support to, PRC online gaming operation companies.  It is not clear whether the regulatory authority of GAPPRFT applies to the regulation of ownership structures of companies operating online gaming businesses in China.  Other government agencies that have regulatory jurisdiction over online gaming operations in China, such as the Ministry of Culture, or the MOC, and the Ministry of Industry and Information Technology, or MIIT, the successor of MII, did not join GAPP in issuing the GAPP Circular.  To date, the GAPPRFT has not issued any interpretation of the GAPP Circular.  It is not yet clear how this GAPP Circular will be implemented.

In August 2011, the Ministry of Commerce, or MOFCOM, promulgated the Rules of the Ministry of Commerce on the Implementation of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the MOFCOM Security Review Rules, to implement the Notice of the General Office of the State Council on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on February 3, 2011, or Circular No. 6. The MOFCOM Security Review Rules came into effect on September 1, 2011 and replaced the Interim Provisions of the Ministry of Commerce on Matters Relating to the Implementation of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated by MOFCOM in March 2011. According to these circulars and rules, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire the “de facto control” of domestic enterprises having “national security” concerns. In addition, when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors is subject to the security review, MOFCOM will look into the substance and actual impact of the transaction. The MOFCOM Security Review Rules further prohibit foreign investors from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. There is no explicit provision or official interpretation stating that our online dating business falls into the scope subject to the security review, and there is no requirement for foreign investors in those mergers and acquisitions transactions already completed prior to the promulgation of Circular No. 6 to submit such transactions to MOFCOM for security review. As we have already obtained the “de facto control” over our variable interest entities, or VIEs, prior to the effectiveness of these circulars and rules and our current businesses do not raise “national defense and security” or “national security” concerns, we do not believe we are required to submit our existing contractual arrangement to MOFCOM for security review. However, as these circulars and rules are relatively new and there is a lack of clear statutory interpretation on the implementation of the same, there is no assurance that MOFCOM will have the same view as we do when applying these national security review-related circulars and rules.

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In the opinion of Zhong Lun Law Firm, our PRC legal counsel, (i) the corporate structure of our company, our PRC subsidiaries, our PRC operating companies and Jiayuan Shanghai Center are in compliance with existing PRC laws and regulations, and (ii) the contractual arrangements between Beijing Miyuan, on the one hand, and our PRC operating companies and/or their shareholders and/or Jiayuan Shanghai Center, on the other hand, are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect.  However, our PRC legal counsel has further advised us that substantial uncertainties still exist as to how the FITE Regulations, MII Circular 2006, the Privately Funded Non-enterprise Institutions Regulation and the GAPP Circular will be interpreted and implemented by the PRC authorities and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the FITE Regulations, MII Circular 2006, the Privately Funded Non-enterprise Institutions Regulation and the GAPP Ciruclar.  Substantial uncertainties also exist as to how the draft PRC Foreign Investment Law or its implementation rules may impact the viability of our current corporate structure in the future. See “Item 3.  Key Information.  D. Risk Factors—Risks Relating to Regulation of Our Business and to Our Structure—Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of the draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.”  It is uncertain whether any other new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide.   If MIIT, MOFCOM, GAPPRFT, the MOC or another PRC regulatory agency subsequently takes a view contrary to ours or if we, our PRC subsidiaries, or any of our PRC operating companies and Jiayuan Shanghai Center are found to have violated any existing or future PRC laws or regulations, or our corporate structure is found to be in violation with any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion in dealing with such violations, including:

·revoking our PRC operating companies’ or Jiayuan Shanghai Center’s business and operating licenses;

·discontinuing or restricting our PRC operating companies’ or Jiayuan Shanghai Center’s operations;

·imposing conditions or requirements with which we or our PRC companies or Jiayuan Shanghai Center may not be able to comply;

·requiring us, our PRC companies or Jiayuan Shanghai Center to restructure the relevant corporate structure or operations; or

·taking other regulatory or enforcement actions, including levying fines and confiscating income, which could be harmful to our business.

Any of these actions could have a material adverse effect on our business, financial condition and results of operations to suffer and the market price of our ADSs to decline.

The contractual arrangements related to critical aspects of our operations with our PRC operating companies and their shareholders and Jiayuan Shanghai Center may not be as effective in providing operational control as direct ownership.

We rely on contractual arrangements with our PRC operating companies and their shareholders and Jiayuan Shanghai Center to operate our business.  These contractual arrangements may not be as effective as direct ownership in providing us with control over our PRC operating companies and Jiayuan Shanghai Center and their subsidiaries.  Direct ownership would allow us, for example, to directly or indirectly exercise our rights as a shareholder to effect changes in the boards of directors of our PRC operating companies, which, in turn, could effect changes, subject to any applicable fiduciary obligations, at the management level.  However, under the current contractual arrangements, as a legal matter, if any of our PRC operating companies, any of their shareholders or Jiayuan Shanghai Center fails to perform its, his or her respective obligations under these contractual arrangements, we may have to incur substantial costs and expend significant resources to enforce those arrangements and rely on legal remedies under PRC law.  These remedies may include seeking specific performance or injunctive relief and claiming damages, any of which may not be effective.

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Under the equity pledge agreements described in “Item 4.  Information on the Company — C. Organizational Structure — Contractual Arrangements with Shanghai Huaqianshu, Beijing Huaqianshu, Beijing Aizhenxin, Xique and their Respective Shareholders and Jiayuan Shanghai Center,” the shareholders of Shanghai Huaqianshu, Beijing Huaqianshu, Xique and Beijing Aizhenxin have pledged their equity interests in Shanghai Huaqianshu, Beijing Huaqianshu, Xique and Beijing Aizhenxin to Beijing Miyuan.  According to the PRC Property Rights Law, which became effective on October 1, 2007, a pledge is created only when such pledge is registered with the relevant office of the administration for industry and commerce.  We have completed the equity pledge registration as required  under the amended and restated equity pledge agreements by and among Beijing Miyuan and the shareholders of Shanghai Huaqianshu, Beijing Huaqianshu, Beijing Aizhenxin and Xique, as the case may be, with the relevant office of the Administration of Industry and Commerce.

However, all of these contractual arrangements, including the equity pledge agreements, are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC.  Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures.  The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States.  As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements.  In the event we are unable to enforce these contractual arrangements, we may be unable to exert effective control over our PRC operating companies and Jiayuan Shanghai Center, and our ability to conduct our business may be materially adversely affected.

Shareholders of our PRC operating companies may potentially have a conflict of interest with us, and they may breach their contracts with us or cause such contracts to be amended in a manner contrary to the interest of our company.

We conduct substantially all of our operations, and generate substantially all of our revenues, through our PRC operating companies and Jiayuan Shanghai Center.  Our control over our PRC operating companies is based upon contractual arrangements with our PRC operating companies and their shareholders, which provide us with the substantial ability to control our PRC operating companies.  The interests of these shareholders may potentially conflict with ours, and these shareholders may breach their contracts with us or cause such contracts to be amended in a manner contrary to the interest of our company if they believe such action furthers their own interest or if they otherwise act in bad faith.  If the shareholders of our PRC operating companies breach their contracts with us or otherwise have disputes with us, we may have to initiate legal proceedings, which involve significant uncertainty.  Such disputes and proceedings may significantly disrupt our business operations, adversely affect our ability to control our PRC operating companies and otherwise result in negative publicity, and we cannot assure you that the outcome of such disputes and proceedings will be in our favor.

Our arrangements with our PRC operating companies and Jiayuan Shanghai Center may be reviewed by the PRC tax authorities for transfer pricing adjustments and subject us to material adverse tax consequences as well as penalties for the under-payment of taxes.

We could face material adverse tax consequences if the PRC tax authorities determine that the contractual arrangements between Beijing Miyuan and our PRC operating companies and Jiayuan Shanghai Center were not entered into based on arm’s length negotiations.  Although we based our contractual arrangements on those of similar businesses, if the PRC tax authorities determine that these contracts were not entered into on an arm’s length basis, they may adjust our income and expenses for PRC tax purposes in the form of a transfer pricing adjustment.  A transfer pricing adjustment could adversely affect us by increasing our PRC operating companies’ and Jiayuan Shanghai Center’s tax liabilities without reducing Beijing Miyuan’s tax liabilities, which could further result in late payment fees and other penalties to our PRC operating companies for the under-payment of taxes.  As a result, any transfer pricing adjustment could materially adversely affect our financial condition and results of operations

Our holding company structure may restrict our ability to receive dividends from, or transfer funds to, our PRC subsidiaries, which could restrict our ability to act in response to changing market conditions and reallocate funds among our Chinese entities in a timely manner.

We are a Cayman Islands holding company and conduct substantially all of our operations through our PRC operating companies and Jiayuan Shanghai Center.  We may rely on dividends and other distributions on equity by our PRC subsidiaries for our cash requirements, including the funds to pay dividends on the ordinary shares underlying our ADSs and to service any debt we may incur or financing we may need for our operations.  If any of our PRC subsidiaries incurs its own debt in the future, the instruments governing the debt may restrict such PRC subsidiary’s ability to pay dividends or make other distributions to Jiayuan Hong Kong and to us.  Furthermore, under PRC laws and regulations, each PRC subsidiary is only permitted to pay dividends out of its retained earnings, if any, determined in accordance with PRC accounting standards and regulations.  Under PRC law, each PRC subsidiary is also required to set aside at least 10% of its after-tax profit (calculated based on PRC accounting standards) each year to its general reserves until the cumulative amount of such reserves reaches 50% of its registered capital.  These reserves are not distributable as cash dividends, loans or advances.  Each PRC subsidiary may also allocate a portion of its after-tax profits, as determined by its board of directors, to its staff welfare and bonus funds, which may not be distributed to us.  Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.  Most of our assets are held by, and substantially all of our earnings and cash flows are attributable to, our PRC operating companies and Jiayuan Shanghai Center, which in turn transfer the economic benefit to our PRC subsidiaries through contractual arrangements.  If earnings from our PRC subsidiaries were to decline, our earnings and cash flow would be materially adversely affected.  Our cash flows are principally derived from dividends paid to us by our PRC subsidiaries.  As a result, our ability to distribute dividends largely depends on earnings from our PRC subsidiaries and their ability to pay dividends out of those earnings. We cannot assure you that our PRC subsidiaries will generate sufficient earnings and cash flows in the near future to make up the historical accumulated losses and pay dividends or otherwise distribute sufficient funds to enable us to meet our obligations, pay interest and expenses or declare dividends.  Any limitation on the ability of our PRC subsidiaries to transfer funds to us as dividends, loans or advances could materially adversely limit our ability to grow, make investments or acquisitions that could benefit our businesses, pay debt or dividends, and otherwise fund and conduct our business.

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In addition, as an offshore holding company of our PRC subsidiaries, we may make loans to our PRC subsidiaries, or we may make additional capital contributions to our PRC subsidiaries.  However, any funds we transfer to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, is subject to registration or approval of PRC governmental authorities, including the relevant administration of foreign exchange and/or the relevant examining and approval authority.  PRC companies are also generally prohibited by PRC law to directly lend money to each other.  Therefore, loans by us to our PRC subsidiaries in China to finance their activities cannot exceed statutory limits and must be registered with SAFE or its local counterpart.  Capital contributions must be approved by the MOFCOM or its local counterpart.  We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capital contributions by us to our PRC subsidiaries.  If we fail to receive such approvals, our ability to use the proceeds of our initial public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to act in response to changing market conditions and reallocate funds among our PRC companies on a timely basis.

There are currently no laws or regulations in the PRC governing property rights of virtual assets and therefore it is not clear what liabilities, if any, we may have relating to the loss of virtual assets by our users.

In the course of using our online services, some virtual assets, such as virtual currencies and virtual gifts, can be acquired. In practice, virtual assets can be lost for various reasons, such as data loss caused by delay of network service, by a network crash, or by hacking activities.  There are currently no PRC laws or regulations governing property rights of virtual assets.  As a result, it is unclear who the legal owner of virtual assets is and whether the ownership of virtual assets is protected by law.  In addition, it is unclear under PRC law whether an operator of online services such as us would have any liability (whether in contract, tort or otherwise) for any loss of such virtual assets by users.  Based on several judgments in the online gaming industry, PRC courts have generally required the game operators to provide well-developed security systems to protect virtual assets owned by game players.  In some cases, courts have issued judgments in favor of users and required the game operator to restore the virtual assets and to pay the users for damages.  Such requirements may also be held to be applicable to other online operators, such as ourselves.  In the event of a loss of virtual assets, we may be sued by users and may be held liable for damages.

The laws and regulations governing the online dating industry and other related business in China are evolving and subject to substantial uncertainties and future changes and we may fail to obtain or maintain all applicable permits and approvals, subjecting us to severe penalties.

As the online dating industry is at an early stage of development in China, new laws and regulations may be adopted from time to time to require additional licenses and permits other than those we currently have, and address new issues that arise.  In addition, substantial uncertainties exist regarding the interpretation and implementation of current and any future PRC laws and regulations applicable to the online dating industry.  We cannot assure you that we will be able to obtain on a timely basis, or at all, required licenses or any other new license required in the future.  We cannot assure you that we will not be found in violation of any current PRC laws or regulations should their interpretations change, or that we will not be found in violation of any future PRC laws or regulations.  For example, the General Office of the State Council issued a rule in December 1994 pursuant to which no marriage agency or individual is permitted to engage in international marriage agency services.  We believe that this rule does not apply to our online dating services, but since the interpretation and application of this rule is unclear, there is no assurance that the relevant regulatory agencies will not interpret this rule to apply to online dating.  In addition, to the extent PRC regulatory authorities find our platforms objectionable, they may impose penalties on us, including revoking our operating licenses or suspending or shutting down our online operations, which would materially and adversely affect our business, results of operations and reputation.

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Furthermore, we have provided offline personalized matchmaking services to certain of our clients through Shanghai Huaqianshu and its Beijing and Wuhan branches, Beijing Huaqianshu and Jiayuan Shanghai Center in China, which may be deemed to be a type of marriage agency service. As China has not adopted a comprehensive and specific regulatory framework governing marriage agency services, there are substantial uncertainties regarding the interpretation and implementation of the relevant laws and regulations, especially by the local authorities in different areas, and no assurance can be given that we will not be found to be in violation such laws and regulations. For example, while the business scope of Shanghai Huaqianshu’s Beijing branch and Beijing Huaqianshu includes “marriage agency services,” the relevant Shanghai and Wuhan governmental authorities did not accept our application for inclusion of “marriage agency services” in the business scope of Shanghai Huaqianshu and its Wuhan branch. To further comply with the relevant laws and regulations, we completed the transfer of the offline personalized matchmaking services of Shanghai Huaqianshu to Jiayuan Shanghai Center and Beijing Huaqianshu in February 2015. In March 2015, Shanghai Huaqianshu’s Wuhan branch ceased to provide offline personalized matchmaking services to certain of our clients. We have been informed that the relevant local authorities in Wuhan have commenced an examination of the operations of Shanghai Huaqianshu’s Wuhan branch to assess whether its provision of marriage agency services is outside its business scope. If the relevant governmental authorities in Shanghai or Wuhan determine that Shanghai Huaqianshu or its Wuhan branch has provided marriage agency services without a proper business license, we may be subject to various administrative penalties, including suspension of marriage agency services by Shanghai Huaqianshu Wuhan and its Wuhan branch, fines or confiscation of illegal gains.

If we fail to obtain or maintain all applicable permits and approvals, or fail to comply with PRC regulations, relating to online games and virtual currencies, our ability to conduct our online game business could be affected and we could be subject to penalties and other administrative sanctions.

Pursuant to PRC regulations regulating online games, in order to operate an online game business and virtual currencies used for online games, an operator should obtain an Online Culture Operating Permit from the MOC (with a business scope covering the operation of online games and issuance of virtual currencies) and an Internet Publication License from GAPPRFT in order to directly make its online games publicly available in China. Furthermore, pursuant to the Provisional Measures on the Administration of Online Games promulgated by the MOC on June 3, 2010, an online mobile games operator should make a filing with the MOC in respect of each domestic game within 30 days of commencing operations. In addition, each online game must be screened by GAPPRFT by way of an approval process before it is first published and made publicly available.

Shanghai Huaqianshu is currently operating our online game business. Shanghai Huaqianshu has obtained the Online Culture Operating Permit from the MOC with respect to its operation of online games and is in the process of filing applications for issuance of virtual currencies and applying for the Internet Publication License. In addition, we have not obtained approval from GAPPRFT or completed the filing with the MOC for our online and mobile games. We cannot assure you that (i) Shanghai Huaqianshu can complete the filing for issuance of virtual currencies and obtain the Internet Publication License; or (ii) we can obtain all the required approvals and complete the relevant filing procedures with the relevant government authorities for each game we operate in a timely manner or at all. If the relevant authority challenges the commercial operation of our games and determines that we are in violation of the relevant laws and regulations regarding online and mobile games, it would have the power to, among other things, levy fines against us, confiscate our income and require us to discontinue our online game business.

Our operations may be adversely affected by the complexity, uncertainties and changes in PRC regulation of Internet-related businesses and companies.

The PRC government extensively regulates the Internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the Internet industry.  These Internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainty.  As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations.  Issues, risks and uncertainties relating to PRC regulation of the Internet business include, but are not limited to, the permits, licenses or operations at some of our companies being subject to challenge or our failure to obtain permits or licenses that may be deemed necessary for our operations or our inability to obtain or renew certain permits or licenses.  If we fail to obtain and maintain any required licenses or approvals, we may be subject to various penalties, including fines and discontinuation of or restrictions on our operations.  Any such disruption in our business operations may have a material and adverse effect on our results of operations.

The interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, Internet businesses in China, including our business.  We cannot assure you that we have obtained all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain any new licenses required under any new laws or regulations.  There are also risks that we may be found to violate the existing or future laws and regulations given the uncertainty and complexity of China’s regulation of internet business.

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Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of the draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.

The MOFCOM published a discussion draft of the proposed Foreign Investment Law in January 2015 aiming to, upon its enactment, replace the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations, the trio of existing laws regulating foreign investment in China. The draft Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in-line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. The MOFCOM is currently soliciting comments on this draft and substantial uncertainties exist with respect to its enactment timetable, interpretation and implementation. The draft Foreign Investment Law, if enacted as proposed, may materially impact the viability of our current corporate structure, corporate governance and business operations in many aspects.

Among other things, the draft Foreign Investment Law expands the definition of foreign investment and introduces the principle of “actual control” in determining whether the investment in China is made by a foreign investor or a PRC domestic investor. The draft Foreign Investment Law specifically provides that an entity established in China but “controlled” by foreign investors will be treated as a foreign investor, whereas an entity set up in a foreign jurisdiction would nonetheless be, upon market entry clearance by the MOFCOM or its local branches, treated as a PRC domestic investor provided that the entity is “controlled” by PRC entities and/or citizens. In this connection, “control” is broadly defined in the draft law to include, among others, having the power to exert decisive influence, via contractual or trust arrangements, over the subject entity’s operations, financial matters or other key aspects of business operations.  If the foreign investment falls within a “negative list” to be separately issued by the State Council in the future, market entry clearance by the MOFCOM or its local branches would be required.  In all other circumstances, foreign investors may make investments on the same terms as Chinese investors without being subjected to additional approvals from the government authorities as mandated by the existing foreign investment legal regime.

The “variable interest entity” structure, or VIE structure, has been adopted by many PRC-based companies in the industries that are currently subject to foreign investment restrictions in China. See “Item 3.  Key Information.  D. Risk Factors—Risks Relating to Regulation of Our Business and to Our Structure—If the PRC government finds that the agreements that establish the structure for operating our China business do not comply with restrictions on foreign investment in the online dating services industry, online gaming industry and prohibitions on privately funded non-enterprise institutions from engaging in profit-making business operations, we could be subject to severe penalties, including discontinuation of our operations” and “Item 4.C. Information on the Company—Organizational Structure.” Under the draft Foreign Investment Law, if a variable interest entity is ultimately controlled by a foreign investor via contractual arrangements, it would be deemed as a foreign investment. Accordingly, for companies with a VIE structure in an industry category that is on the “negative list,” the VIE structure may be deemed legitimate only if the ultimate controlling person(s) is or are of PRC nationality. Conversely, if the actual controlling person(s) is or are of foreign nationalities, then the variable interest entities will be treated as foreign invested enterprises and any operation in the industry category on the “negative list” without market entry clearance may be considered illegal.

There is no assurance that we will be regarded as a company controlled by PRC nationals since the draft Foreign Investment Law does not provide clear guidance on the meaning of “control.” In addition, the draft Foreign Investment Law has not taken a position on what actions shall be taken with respect to the existing companies with a VIE structure, although a few possible options were proffered to solicit comments from the public. Under these options, a company with VIE structures and in the business on the “negative list” at the time of enactment of the new Foreign Investment Law has either the option or obligation to disclose its corporate structure to the authorities, while the authorities, after reviewing the ultimate control structure of the company, may either permit the company to continue its business by maintaining the VIE structure (when the company is deemed ultimately controlled by PRC citizens) or require the company to dispose of its businesses and/or VIE structure.  Moreover, it is uncertain whether the online dating and online gaming industries, in which our variable interest entities operate, will be subject to the foreign investment restrictions or prohibitions set forth in the “negative list” which may be issued.  If the enacted version of the Foreign Investment Law and the final “negative list” mandate further actions, such as MOFCOM market entry clearance, to be completed by companies with existing VIE structure like ourselves, or we plan to apply for determination on the PRC investor status during the clearance process, we face uncertainties as to whether such clearance or ratification can be timely obtained or at all.

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The draft Foreign Investment Law, if enacted as proposed, may also materially impact our corporate governance practice and increase our compliance costs. For instance, the draft Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and the applicable foreign invested entities. In addition to the investment implementation report and any investment amendment report that is required at each investment and any alteration of investment details, an annual report will be mandatory and large foreign investors meeting certain criteria are required to report on a quarterly basis. Any company found to be non-compliant with the information reporting obligations may potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly responsible may be subject to criminal liabilities.

Risks Relating to Doing Business in China

Changes in economic and political policies of the PRC government could materially adversely affect the overall economic growth of China, which could adversely affect our business.

Substantially all of our business operations are conducted in China.  Accordingly, our business, results of operations, financial condition and prospects are subject to a significant degree to economic, political and legal developments in China.  Due to the global financial crisis, the growth of the Chinese economy also slowed down in the second half of 2008 and early 2009.  While the effect of the global economic crisis subsided through 2010, the growth of the Chinese economy slowed down again in the second half of 2011 and in 2012, 2013 and 2014.  It is unclear whether the Chinese economy will resume its high growth rate.  Any prolonged slowdown in the Chinese economy, in particular in the online social network or online dating industry, could negatively impact our business, operating results and financial condition in a number of ways.  For example, our users may decrease spending on our services, while we may have difficulty expanding our user base fast enough, or at all, to offset the impact of decreased spending by our existing users.

Although the Chinese economy is no longer a planned economy, the PRC government continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB and foreign currencies, and regulate the growth of the general or specific market.  The level of government involvement has been instrumental in China’s significant growth in the past 30 years.  If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or otherwise negatively affect our business, our growth rate or strategy, our results of operations could be adversely affected as a result.

China’s internet regulator, Cyberspace Administration of China, may enforce real-name registration on online dating sites, which could affect adversely our user base, user engagement with our platforms and our business.

The Cyberspace Administration of China launched a campaign in February 2015 targeting fraud rings, prostitution and service providers’ fraudulent practices on dating websites and other online match-making sites. The government body said it would require dating websites to enforce real-name registration and clearly label and gradually close user accounts which fail to submit real-name verification. However, the government body did not specify a timeline to enforce the real-name registration. If this regulation applies, our existing user base and the number of newly registered user accounts could be affected adversely, as some of our users may not provide real-name verification in order to maintain their privacy.

As a result of the campaign, 65 online dating sites have been shut down for spreading obscene content and allowing users to register with false names. Although we have controls in place in an effort to limit such activities, we cannot conclude that there is no illegal activity conducted by our members on our platforms. Such controls also require continuous effort to crack down on unhealthy dating behaviors on our platforms, which will result in an increase in our research and development expenses. Failure to discover illegal activities on our platforms on a timely basis may lead to government investigations and sanctions, which could have a material and adverse effect on our business.

Our business benefits from certain government tax preferential treatment and incentives.  Expiration, reduction or discontinuation of, or changes to, these incentives will increase our tax burden and reduce our net income.

Prior to January 1, 2008, under applicable PRC tax laws, companies established in China were generally subject to an enterprise income tax, or EIT, at the statutory rate of 33%.  However, certain types of foreign-invested enterprises and high or new-technology enterprises located in certain specified high-tech zones were entitled to preferential tax treatment.  In March 2007, the National People’s Congress enacted the Enterprise Income Tax Law, or the EIT Law, and in December 2007, the State Council promulgated the implementing rules of the EIT Law, or the Implementing Rules, both of which became effective on January 1, 2008.  The EIT Law significantly curtails tax incentives granted to foreign-invested enterprises under the previous tax law.  The EIT Law, however, (i) reduces the statutory rate of EIT from 33% to 25%, (ii) permits companies to continue to enjoy their existing tax incentives, subject to certain transitional phase-out rules and (iii) introduces new tax incentives, subject to various qualification criteria.  In addition, the Implementing Rules permit qualified “high and new technology enterprises,” or HNTEs, to enjoy a reduced EIT rate of 15%.  The qualification criteria are significantly higher than those prescribed by the old tax rules under which we had been granted preferential treatment.  In addition, according to a circular issued by the Ministry of Finance of the PRC and the State Administration of Taxation of the PRC on February 22, 2008, “software enterprises” are entitled to an exemption from income taxes for two years beginning with their first profitable year and a 50% tax reduction to a 12.5% income tax rate for the subsequent three years, provided the “software enterprise” annual inspection has been passed each year.

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Shanghai Huaqianshu has been deemed to qualify as an HNTE under the EIT Law for 2010, 2011 and 2012, and was qualified as key software enterprise in 2014 and was entitled to an income tax rate of 10% for 2013 and 2014. In March 2014, Shanghai Huaqianshu completed the application process for the renewal of HNTE status and expects to continue to enjoy a preferential income tax rate of 15% for 2013 to 2015. Beijing Miyuan has qualified as a “software enterprise,” allowing it to be exempt for two years beginning with its first profitable year and a 50% tax reduction to a 12.5% income tax rate for the subsequent three years if it passes the “software enterprise” annual inspection in each of these years.  Although Shanghai Huaqianshu was qualified as a key software enterprise for 2013 and 2014 and as a HNTE for the three years starting from 2013 and Beijing Miyuan was qualified as a software enterprise in 2014, we cannot assure you that Shanghai Huaqianshu will pass the annual inspection of the software enterprise qualification and continue to qualify as a key software enterprise or a HNTE under the EIT Law or that Beijing Miyuan will pass the annual inspection of the software enterprise qualification and continue to qualify as a “software enterprise.”  Shanghai Miyuan had qualified as a “software enterprise,” allowing it to be exempt from income taxes for the 2011 and 2012 fiscal years and apply for a preferential tax rate of 12.5% for the 2013, 2014 and 2015 fiscal years.  However, as Shanghai Miyuan was not continually qualified as a software enterprise in 2014, it became subject to the standard EIT rate of 25% in 2014 and thererafter. In addition, various local governments in China have provided discretionary incentives to us.  However, these local governments may decide to reduce or eliminate these preferential tax treatments or incentives at any time. Furthermore, these local implementations of tax laws may be found to violate national laws or regulations and we may be subject to retroactive imposition of higher taxes as a result.  Any expiration, reduction, discontinuation or revocation of, or changes to, these tax incentives will increase our tax burden and reduce our net income and thus could materially and adversely affect our operating results.

Dividends we receive from our PRC subsidiaries may be subject to PRC withholding tax and we cannot assure you that we will be able to enjoy the preferential withholding tax treatment.

Under the EIT Law, and the Implementing Rules, both of which became effective on January 1, 2008, dividends generated from the business of our PRC subsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are a non-resident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.  We are a Cayman Islands holding company and substantially all of our income may come from the dividends we received from our PRC subsidiaries through our Hong Kong subsidiary.  Under the Arrangement between Mainland China and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion, which became effective on January 1, 2007, income tax on dividends payable to a company resident in Hong Kong that holds more than a 25% equity interest in a PRC resident enterprise may be reduced to a rate of 5%.  However, we cannot assure you that we will be able to enjoy such preferential withholding tax treatment.  According to the Circular of the State Administration of Taxation on Printing and Issuing the Administrative Measures for Non-resident Individuals and Enterprises to Enjoy the Treatment Under Taxation Treaties, which became effective on October 1, 2009, the 5% tax rate does not automatically apply and approvals from competent local tax authorities are required before an enterprise can enjoy the relevant tax treatments relating to dividends under relevant taxation treaties.  In addition, according to the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued by the State Administration of Taxation, or the SAT, in February 2009, if the main purpose of an offshore arrangement is to obtain a preferential tax treatment, the PRC tax authorities have the discretion to adjust the preferential tax rate enjoyed by the relevant offshore entities.

We may be classified as a “resident enterprise” for PRC enterprise income tax purposes, which could result in our global income becoming subject to 25% PRC enterprise income tax.

The EIT Law also provides that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” and will generally be subject to the uniform 25% EIT rate as to their global income. Under the Implementing Rules, “de facto management bodies” is defined as substantial and overall management and control over such aspects as the production and business, personnel, accounts and properties of an enterprise.

On April 22, 2009, the SAT released the Notice Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or SAT Circular 82, that sets out the standards and procedures for recognizing the location of the “de facto management bodies” of an enterprise registered outside of the PRC and funded by Chinese enterprises as controlling investors, or a Chinese Funded Enterprise.  Under SAT Circular 82, a Chinese Funded Enterprise shall be considered a resident enterprise if all of the following applies: (i) a Chinese Funded Enterprise’s major management department and personnel who are responsible for carrying out daily operations are located in the PRC; (ii) the department or the personnel who have the right to decide or approve the Chinese Funded Enterprise’s financial and human resource matters are located in the PRC; (iii) the major assets, account book, company seal and meeting minutes of the Chinese Funded Enterprise are located or stored in the PRC; and (iv) the directors or management personnel holding no less than 50% voting rights of the Chinese Funded Enterprise habitually reside in the PRC.  SAT Circular 82 explicitly provides that the above standards shall apply to the enterprises which are registered outside of the PRC and funded by Chinese enterprises as controlling investors, and therefore such standards may be cited for reference only and may not be directly adopted when considering whether our “de facto management bodies” is in the PRC or not.  Accordingly, it is still uncertain whether we may be considered a resident enterprise under the EIT Law. If we are considered a resident enterprise and earn income other than dividends from our PRC subsidiary such as income from our international operations, we will be subject to a 25% PRC enterprise income tax on our global income and such tax on our global income could significantly increase our tax burden and materially adversely affect our cash flow and profitability.

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If we are classified as a “resident enterprise” for PRC enterprise income tax purposes, you may be subject to PRC withholding tax on dividends from us or to PRC income tax on gain realized on the transfer of our ADSs or ordinary shares.

Under the EIT Law and Implementing Rules, PRC income tax at the rate of 10% is applicable to dividends payable to investors that are “non-resident enterprises,” which do not have an establishment or place of business in the PRC, or which have such establishment or place of business if the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends have their sources within the PRC.  Similarly, any gain realized on the transfer of ADSs or shares by such investors is also subject to 10% PRC income tax if such gain is regarded as income derived from sources within the PRC unless a treaty otherwise provides.  If we are considered a PRC “resident enterprise,” it is unclear whether dividends we pay with respect to our ordinary shares or ADSs or preferred shares, or the gain you may realize from the transfer of our ordinary shares or ADSs, would be treated as income derived from sources within the PRC and be subject to PRC tax.  If we are required under the EIT Law to withhold PRC income tax on dividends payable to our non-PRC investors that are “non-resident enterprises,” or if you are required to pay PRC income tax on the transfer of our ordinary shares or ADSs, the value of your investment in our ordinary shares or ADSs may be materially adversely affected.

The heightened scrutiny by the PRC tax authorities over acquisition transactions may have a negative impact on our business operations, our acquisition or restructuring strategy or the value of your investment in us.

The State Administration of Taxation, or SAT, has issued several rules and notices to tighten the scrutiny over acquisition transactions in recent years, including the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises issued in December 2009 with retroactive effect from January 1, 2008, or SAT Circular 698, the Notice on Several Issues Regarding the Income Tax of Non-PRC Resident Enterprises promulgated issued in March 28, 2011, or SAT Circular 24, and the Notice on Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-PRC Resident Enterprises issued in February 2015, or SAT Circular 7.  Pursuant to these rules and notices, if a non-PRC resident enterprise indirectly transfers PRC taxable properties, such as properties of an establishment or a place in the PRC, real estate properties in the PRC or equity investments in a PRC tax resident enterprise, by disposing  equity interest in an overseas non-public holding company without a reasonable commercial purpose and resulting in the avoidance of PRC enterprise income tax, such an indirect transfer may be deemed a direct transfer of PRC taxable properties and gains derived from such indirect transfer may be subject to PRC withholding tax at a rate of up to 10%.  SAT Circular 7 has listed several factors to be taken into consideration by tax authorities in determining whether an indirect transfer has a reasonable commercial purpose.  However, despite these factors, an indirect transfer satisfying all the following criteria shall be deemed to lack reasonable commercial purpose and be taxable under the PRC laws: (i) 75% or more of the equity value of the intermediary enterprise being transferred is derived directly or indirectly from the PRC taxable properties; (ii) at any time during the one year period prior to the indirect transfer, 90% or more of the asset value of the intermediary enterprise (excluding cash) is comprised directly or indirectly of investments in the PRC, or 90% or more of its income is derived directly or indirectly from the PRC; (iii) the functions performed and risks assumed by the intermediary enterprise and any of its subsidiaries that directly or indirectly hold the PRC taxable properties are limited and are insufficient to prove their economic substance; and (iv) the foreign tax payable on the gain derived from the indirect transfer of the PRC taxable properties is lower than the potential PRC tax on the direct transfer of such assets.  Nevertheless, the indirect transfer falling into the scope of the safe harbor under SAT Circular 7 may not be subject to PRC tax and such safe harbor includes qualified group restructuring, public market trading and tax treaty exemptions.

Under SAT Circular 7, the entities or individuals obligated to pay the transfer price to the transferor shall be the withholding agent and shall withhold the PRC tax from the transfer price.  If the withholding agent fails to do so, the transferor shall report to and pay the PRC tax to the PRC tax authorities.  In case neither the withholding agent nor the transferor complies with the obligations under SAT Circular 7, other than imposing penalties such as late payment interest on the transferors, the tax authority may also hold the withholding agent liable and impose a penalty of 50% to 300% of the unpaid tax on the withholding agent, provided that such penalty imposed on the withholding agent may be reduced or waived if the withholding agent has submitted the relevant materials in connection with the indirect transfer to the PRC tax authorities in accordance with SAT Circular 7.

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However, as these rules and notices are relatively new and there is a lack of clear statutory interpretation on the implementation of the same, there is no assurance that the tax authorities will not apply SAT Circular 698, SAT Circular 24 and SAT Circular 7 to previous investments by non-PRC resident investors in our Company or our pre-listing restructuring, if any of such transactions were determined by the tax authorities to lack reasonable commercial purpose. As a result, we and our existing non-PRC resident investors may be at risk of being taxed under these rules and notices and may be required to expend valuable resources to comply with or to establish that we should not be taxed under such rules and notices, which may have a material adverse effect on our financial condition and results of operations or such non-PRC resident investors’ investments in us. We have conducted and may conduct acquisitions involving corporate structures, and historically our shares were transferred by certain then shareholders to our current shareholders. We cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing obligations on us or require us to provide assistance for the investigation of PRC tax authorities with respect thereto. Any PRC tax imposed on a transfer of our shares or any adjustment of such gains would cause us to incur additional costs and may have a negative impact on the value of your investment in us.

Uncertainties with respect to the PRC legal system could materially adversely affect us.

We conduct our business primarily through our PRC companies in China.  Our operations in China are governed by PRC laws and regulations.  The PRC legal system is based on statutes.  Prior court decisions may be cited for reference but have limited precedential value.

Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.  However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China.  In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties.  In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect.  As a result, we may not be aware of our violation of these policies and rules until some time after the violation.  In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.  We cannot predict any future development in the PRC legal system.  We may be required to procure additional permits, authorizations and approvals for our operations, which we may not be able to obtain.  Our inability to obtain such permits, authorizations or approvals may materially adversely affect our business, financial condition and results of operations.

Governmental control of currency conversion may affect the value of your investment.

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of foreign currency out of China.  We currently receive substantially all of our revenues in Renminbi.  Under our current corporate structure, our income is primarily derived from dividend payments from our PRC subsidiaries.  The unavailability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency-denominated obligations.  Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However, approval from SAFE or its local branch is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.  The PRC government may also at its discretion restrict access to foreign currencies for current account transactions in the future.  If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs. On August 29, 2008, the SAFE promulgated Circular 142 to regulate the conversion of foreign currency into Renminbi by a foreign-invested company by restricting the use of the converted Renminbi.  Circular 142 requires that the registered capital of a foreign-invested company that has been settled in Renminbi converted from foreign currencies may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless otherwise permitted in its business scope or under applicable laws and regulations.  In addition, the SAFE strengthened its oversight of the flow and use of the funds of a foreign-invested company settled in Renminbi converted from foreign currencies.  The use of such Renminbi capital may not be changed without the SAFE’s approval, and may not in any case be used to repay Renminbi loans if the proceeds of such loans have not been used for purposes within the company’s approved business scope.  Violations of Circular 142 will result in severe penalties, such as heavy fines. SAFE issued a circular on March 30, 2015, SAFE Circular No. 19, which will become effective on June 1, 2015 and will replace SAFE Circular No. 142. Pursuant to SAFE Circular No. 19, up to 100% of the foreign currency capital of a foreign invested enterprise may be converted into RMB capital according to the actual business of the enterprise at its will and the RMB capital converted from the foreign currency registered capital of a foreign-invested enterprise may be used for equity investments within the PRC. However, under the SAFE Circular No. 19, RMB capital converted from the foreign currency registered capital of a foreign-invested company still may not in any case be used to advance RMB entrusted loans or repay inter-enterprise RMB loans. Such circulars may significantly limit our PRC subsidiaries’ ability to utilize the net proceeds transferred to it from our initial public offering.

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Fluctuation in the value of the RMB may materially adversely affect the value of your investment.

The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions.  On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three years. For almost two years after reaching a high against the U.S. dollar in July 2008, the Renminbi traded within a narrow band against the U.S. dollar.  As a consequence, the RMB has fluctuated significantly since July 2008 against other freely traded currencies, in tandem with the U.S. dollar.  In June 2010, the PRC government announced that it would increase Renminbi exchange rate flexibility and since that time the Renminbi has gradually appreciated against the U.S. dollar.  In April 2012, the PRC government announced it would increase the trading band between the RMB and U.S. dollar from 0.5% to 1%.  However, it remains unclear how this flexibility might be implemented.  There remains significant international pressure on the PRC government to adopt a more flexible currency policy, which could result in greater fluctuation of the Renminbi against the U.S. dollar.  Substantially all of our revenues and costs are denominated in RMB, and a significant portion of our financial assets are also denominated in RMB. We also record foreign transaction gains or losses in our income statement due to fluctuations in the exchange rate. We principally rely on dividends and other distributions paid to us by our subsidiaries in China.  Any significant revaluation of the RMB may materially adversely affect our cash flows, revenues, earnings and financial position, and the value of, and any dividends payable on, our ADSs in U.S. dollars.  Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also result in foreign currency translation losses for financial reporting purposes.

PRC regulations relating to the establishment of offshore SPVs by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liabilities or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or may otherwise adversely affect us.

SAFE has promulgated several regulations, including the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Circular No. 75, effective on November 1, 2005, the Circular on Several Issues Concerning Foreign Exchange Administration of Domestic Residents Engaging in Overseas Investment, Financing and Round-Trip Investment via Special Purpose Vehicles, or SAFE Circular 37, which replaced the SAFE Circular No.75 and became effective on the same date, and other related rules.  These rules require PRC residents to register with the local branch of SAFE before contributing their legally owned onshore or offshore assets or equity interest into any special purpose vehicle, or SPV, directly established, or indirectly controlled, by them for the purpose of investment or financing and when there is (a) any change to the basic information of the SPV, such as any change relating to its individual PRC resident shareholders, name or operation period or (b) any material change, such as increase or decrease in the share capital held by its individual PRC resident shareholders, a share transfer or exchange of the shares in the SPV, or a merger or split of the SPV, the PRC resident must register such changes with the local branch of SAFE on a timely basis.  According to the relevant SAFE rules, failure to comply with the registration procedures set forth in SAFE Circular 37 may result in restrictions being imposed on the foreign exchange activities of the relevant onshore companies of SPVs, including the payment of dividends and other distributions to its offshore parent or affiliate and the capital inflow from such offshore entity, and may also subject the relevant PRC residents and onshore companies to penalties under PRC foreign exchange administration regulations.  Further, failure to comply with various SAFE registration requirements described above would result in liability for foreign exchange evasion under PRC laws.

We have requested PRC residents who, to our knowledge, hold direct or indirect interests in our company to make the necessary applications, filings and amendments as required under SAFE Circular No. 37 and other related rules.  Ms. Haiyan Gong, Mr. Yongqiang Qian, Mr. Xu Liu, Mr. Fuping Yu, Mr. Cheng Li and Mr. Qingjun Zhu have completed the registrations in relation to our Reorganization and their ownership changes in accordance with SAFE Circular No. 75, and they are required to update the registration or amendment registration in relation to our initial public offering. We cannot assure you, however, that such registrations will be duly completed with the local SAFE branch.  In addition, we may not be informed of the identities of all the PRC residents holding direct or indirect interests in our company, and we cannot provide any assurances that all of our shareholders and beneficial owners who are PRC residents will comply with our request to make, obtain or update any applicable registrations or comply with SAFE Circular No. 37 or other related rules.  The failure or inability of our PRC resident shareholders to make any required registrations or comply with other requirements under SAFE Circular No. 37 and other related rules may subject such PRC residents or our PRC subsidiaries to fines and legal sanctions and may also limit our ability to contribute additional capital or provide loans to (including using the proceeds from our initial public offering) our PRC subsidiaries, limit our PRC subsidiaries’ ability to pay dividends or otherwise distribute profits to us, or otherwise adversely affect us.

The approval of the China Securities Regulatory Commission, or the CSRC, may have been required in connection with our initial public offering under PRC regulations and, if required, we cannot assure you that we will be able to obtain such approval.

On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, the SAT, the State Administration for Industry and Commerce, the CSRC, and the SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and was amended on June 22, 2009.  The M&A Rules require Offshore SPVs that are controlled by PRC companies or residents and that have been formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies or assets to obtain CSRC approval prior to publicly listing their securities on an overseas stock exchange.  On September 21, 2006, the CSRC published a notice on its websites specifying the documents and materials that special purpose vehicles are required to submit when seeking CSRC approval for their listings outside of China.  The interpretation and application of the M&A Rules remain unclear, and our initial public offering may have required approval from the CSRC, and if it did, it is uncertain how long it will take us to obtain the approval.

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Our PRC legal counsel, Zhong Lun Law Firm, has advised us that, based on their understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, because (i) we established our PRC subsidiaries by means of direct investment other than by merger or acquisition of the equity or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rules that are our beneficial owners after the effective date of the M&A Rules, and (ii) no provisions in the M&A Rules clearly classify our contractual arrangements with our PRC operating companies as the acquisition subject to the M&A Rules, we are not required to apply with the CSRC for the approval of the listing and trading of our ADSs on the Nasdaq Global Select Market.

However, our PRC legal counsel has further advised us that uncertainties still exist as to how the M&A Rules will be interpreted and implemented and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.  If the CSRC or another PRC regulatory agency determines that prior CSRC approval was required, we may be unable to obtain a waiver of CSRC approval requirements and we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.  These regulatory agencies may impose fines and penalties on our operations, limit our operating privileges, delay or restrict the injection of the proceeds from our initial public offering into the PRC or payment or distribution of dividends by our PRC subsidiaries, or take other actions that could materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur.  In addition, if CSRC requires that we obtain its approval for our initial public offering, we may be unable to obtain a waiver of CSRC approval requirements, if and when procedures are established to obtain such a waiver.  Any uncertainties or negative publicity regarding CSRC approval requirements could have a material adverse effect on the trading price of our ADSs.

Failure to comply with PRC regulations regarding the registration of share options held by our employees who are “domestic individuals” may subject such employees or us to fines and legal or administrative sanctions.

Pursuant to the Implementation Rules of the Administrative Measures for Individual Foreign Exchange , or the Individual Foreign Exchange Rule, promulgated on January 5, 2007 by the SAFE and the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company issued by the SAFE in February 2012, or the Stock Incentive Plan Rules, which terminated the Processing Guidance on Foreign Exchange Administration of Domestic Individuals Participating in the Employee Stock Ownership Plans or Stock Option Plans of Overseas-Listed Companies issued by the SAFE in March 2007, “domestic individuals” (both PRC residents and non-PRC residents who reside in the PRC for a continuous period of not less than one year, excluding the foreign diplomatic personnel and representatives of international organizations) who are granted shares or share options by an overseas-listed company according to its stock incentive plan are required, through qualified PRC agents which could be the PRC subsidiary of such overseas-listed company, to register with the SAFE and complete certain other procedures related to the stock incentive plan.  In addition, such domestic individuals shall also retain an overseas entrusted institution to handle matters in connection with their exercise of stock options and their purchase and sale of stocks. Our employees and consultants, who are “domestic individuals” and have been granted share options, or PRC optionees, became subject to the Stock Incentive Plan Rules when our company became an overseas listed company upon the completion of our initial public offering.  If we or our PRC optionees fail to comply with the Individual Foreign Exchange Rule and the Stock Incentive Plan Rules, we and/or our PRC optionees may be subject to fines and other legal sanctions.  We may also face regulatory uncertainties that could restrict our ability to adopt additional option plans for our directors and employees under PRC law.  In addition, the SAT has issued certain circulars concerning employee share options.  Under these circulars, our employees working in the PRC who exercise share options will be subject to PRC individual income tax.  Our PRC subsidiaries have obligations to file documents related to employee share options with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options.  If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC government authorities.  Furthermore, there are substantial uncertainties regarding the interpretation and implementation of the Individual Foreign Exchange Rule and the Stock Incentive Plan Rules.  See “Item 4—Information on the Company—B.  Regulation—Regulations on Stock Incentive Plan.”

We face risks of health epidemics and other disasters, which could severely disrupt our business operations.

Our business could be materially adversely affected by the outbreak of H1N1, or swine influenza, avian influenza, severe acute respiratory syndrome, or SARS, or another epidemic.  In 2009 and early 2010, there were outbreaks of swine influenza in certain regions of the world, including China.  In 2006 and 2007, there were reports on the occurrences of avian influenza in various parts of China, including a few confirmed human cases and deaths, and in early 2013, there were reports on the occurrences of a new strain of avian influenza in various parts of China, including a few confirmed human cases and deaths.  Any prolonged recurrence of swine influenza, avian influenza, SARS or other adverse public health developments in China could adversely affect economic activities in China and require the temporary closure of our offices.  Such closures could severely disrupt our business operations and adversely affect our results of operations.

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Our operations are vulnerable to interruption and damage from man-made or natural disasters, including wars, acts of terrorism, snowstorms, earthquakes, fire, floods, environmental accidents, power loss, communications failures and similar events.  If any man-made or natural disaster were to occur in the future, our ability to operate our business could be seriously impaired.

Labor laws in the PRC may adversely affect our results of operations.

China adopted a labor contract law effective on January 1, 2008, that establishes more restrictions and increases costs for employers to dismiss employees.  For example, the labor contract law requires certain terminations to be based upon seniority and not merit.  In the event we decide to significantly change or decrease our workforce in the PRC, the labor contract law could adversely affect our ability to effect such changes in a manner that is most advantageous to our circumstances or in a timely and cost effective manner, thus our results of operations could be adversely affected.  In addition, the labor contract law requires employers to pay compensation to their employees who agree to bear non-competition obligations on a monthly basis after the employees’ employment expires or terminates, which will increase employers’ operating expenses.

Our failure to fully comply with PRC labor-related laws exposes us to potential penalty risks.

Companies operating in China are required to participate in various government-sponsored employee benefit plans, including certain pension, housing and other welfare-oriented payment obligations.  One of our PRC operating companies, Shanghai Huaqianshu, has not fully paid the contributions to such plans, as required by applicable PRC regulations.  As of December 31, 2014, the outstanding contributions to social insurance funds and housing funds of Shanghai Huaqianshu for which we made provisions amounted to RMB4.0 million (US$0.6 million).  While we believe we have made adequate provisions for such outstanding amounts in our audited financial statements, our prior failure to make payments may be in violation of applicable PRC labor-related laws and we may be subject to fines if we fail to rectify any violations within the period prescribed by the relevant authorities.  In addition, in the event that any current or former employee files a complaint with the PRC government, we may be required to make additional contributions to our employee benefit plans as well as to pay administrative fines.

According to applicable PRC regulations, employers failing to pay various government sponsored employee benefit plans in accordance with the relevant rules may be ordered to rectify violations and make the required contributions to such plans within a stipulated deadline and can be assessed a late fee of 0.2% or 0.05%, as the case may be, of the amount overdue per day from the original due date by the relevant authority.  If the payment is not made by the stipulated deadline, the employer may be assessed fines by the relevant government authority of up to three times the amount of any under-reported obligation of the employer. Employers failing to make housing fund contributions may be ordered to rectify any such violation within a prescribed time limit.  If an employer fails to rectify a failure to pay within the prescribed time limit, fines ranging between RMB10,000 and RMB50,000 may be imposed and an application may be made to a local court for compulsory enforcement.   Late fees, penalties or legal or administrative proceedings to which we may be subject could materially and adversely affect our reputation, financial condition and results of operations.

If additional remedial measures are imposed on the Big Four PRC-based accounting firms, including our independent registered public accounting firm, in administrative proceedings brought by the SEC alleging the firms’ failure to meet specific criteria set by the SEC, we could be unable to timely file future financial statements in compliance with the requirements of the Securities Exchange Act of 1934.

In December 2012, the SEC instituted administrative proceedings against Big Four PRC-based accounting firms, including our independent registered public accounting firm, alleging that these firms had violated U.S. securities laws and the SEC’s rules and regulations thereunder by failing to provide to the SEC the firms’ audit work papers with respect to certain PRC-based companies that are publicly traded in the United States. On January 22, 2014, the Administrative Law Judge presiding over the matter, or ALJ, rendered an initial decision that each of the firms had violated the SEC’s rules of practice by failing to produce audit workpapers to the SEC. The initial decision censured each of the firms and barred them from practicing before the SEC for a period of six months. The Big Four PRC-based accounting firms appealed the ALJ’s initial decision to the SEC. The ALJ’s decision does not take effect unless and until it is endorsed by the SEC. On February 6, 2015, the four China-based accounting firms each agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid suspension of their ability to practice before the SEC and audit U.S.-listed companies. The settlement required the firms to follow detailed procedures and to seek to provide the SEC with access to Chinese firms’ audit documents via the CSRC. If future document productions fail to meet specified criteria or there is a failure on the process between the SEC and the CSRC, the SEC retains authority to impose a variety of additional remedial measures on the firms depending on the nature of the failure. If the accounting firms are subject to additional remedial measures, our ability to file our financial statements in compliance with SEC requirements could be impacted. A determination that we have not timely filed financial statements in compliance with SEC requirements could ultimately lead to the delisting of our ADSs from NASDAQ or the termination of the registration of our ordinary shares and ADSs under the Securities Exchange Act of 1934, or both, which would substantially reduce or effectively terminate the trading of our ADSs in the United States.

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The audit report included in this annual report has been prepared by an independent registered public accounting firm who is not inspected by the U.S. Public Company Accounting Oversight Board and, as a result, you are deprived of the benefits of such inspection.

Accounting firms of companies that are registered with the SEC and traded publicly in the United States, including our independent registered public accounting firm, must be registered with the U.S. Public Company Accounting Oversight Board, or the PCAOB, and are required by the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and professional standards. As our independent registered public accounting firm is located in the People’s Republic of China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the PRC authorities, our independent registered public accounting firm is not currently inspected by the PCAOB.

This lack of PCAOB inspections in China prevents the PCAOB from regularly evaluating audits and quality control procedures of any accounting firm operating in China, including our independent registered public accounting firm. As a result, investors are deprived of the benefits of PCAOB inspections.

The inability of the PCAOB to conduct inspections of accounting firms in China makes it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to accounting firms outside of China that are subject to PCAOB inspections. Investors may lose confidence in our reported financial information and procedures and the quality of our financial statements.

Risks Relating to Our Ordinary Shares and ADSs

The market price movement of our ADSs may be volatile, and the value of your investment in our ADSs may decrease.

The market price of our ADSs may be volatile and subject to wide fluctuations.  Among the factors that could affect the price of our ADSs are risk factors described in this section and other factors, including:

·announcements by us or our competitors of new services, acquisitions, strategic relationships, joint ventures or capital commitments;

·regulatory developments in our target markets affecting us, our users or our competitors;

·actual or anticipated fluctuations in our quarterly operating results;

·failure of our quarterly financial and operating results to meet market expectations or failure to meet our previously announced guidance;

·changes in financial estimates by securities research analysts;

·negative publicity, studies or reports;

·changes in the economic performance or market valuations of other Internet or online dating services companies;

·additions or departures of our executive officers and other key personnel;

·announcements regarding actual or threatened litigation involving us or any of our directors and officers;

·release or expiration of transfer restrictions on our outstanding ordinary shares and ADSs; and

·sales or anticipated sales of additional ordinary shares or ADSs.

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In addition, the performance, and fluctuation in market prices, of other companies with business operations located mainly in China that have listed their securities in the United States may affect the volatility in the price of and trading volumes of our ADSs. Volatility in global capital markets, as was experienced during the global financial crisis, could also have an adverse effect on the market price of our ADSs. Furthermore, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular industries or companies.  These market fluctuations may also materially adversely affect the market price of our ADSs.

We may be required to withhold PRC income tax on the dividends we pay you (if any), and any gain you realize on the transfer of our ordinary shares and/or ADSs may also be subject to PRC withholding tax.

Pursuant to the EIT Law, we may be treated as a PRC resident enterprise for PRC tax purposes.  See “Item 3.  Key Information.  D. Risk Factors—Risks Relating to Doing Business in China—We may be classified as a ‘resident enterprise’ for PRC enterprise income tax purposes, which could result in our global income becoming subject to 25% PRC enterprise income tax.” If we are so treated by the PRC tax authorities, we would be obligated to withhold PRC income tax at the reduced rate of up to 5% on payments of dividends on our shares and/or ADSs to investors that are non-resident enterprises of the PRC located in Hong Kong (provided that the competent PRC tax authority approves payment of income tax at such reduced rate) and 10% on payments of dividends on our ordinary shares and/or ADSs to investors that are non-resident enterprises of the PRC located outside Hong Kong, because the dividends payable on our ordinary shares and/or ADSs would be regarded as being derived from sources within the PRC.  In addition, it is unclear if there will be any future guidance extending the withholding tax to dividends we pay to our non-PRC individual shareholders.  Furthermore, any gain realized by any investors who are non-resident enterprises of the PRC from the transfer of our ordinary shares and/or ADSs could be regarded as being derived from sources within the PRC and be subject to a 10% PRC withholding tax and likewise, gains realized by any investors who are non-resident individuals of the PRC from transfer of our ordinary shares and/or ADSs shall be subject to a 20% PRC withholding tax.  Such PRC withholding tax would reduce your investment return on our ordinary shares and/or ADSs and may also materially adversely affect the price of our ordinary shares and/or ADSs.

Substantial future sales of our ADSs or ordinary shares in the public market, or the perception that these sales could occur, could cause the price of our ADSs to decline.

If our shareholders sell substantial amounts of our ADSs, including those issued upon the exercise of outstanding options, in the public market, the market price of our ADSs could fall. Such sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. If any existing shareholder or shareholders sell a substantial amount of ordinary shares, the prevailing market price for our ADSs could be adversely affected.

In addition, we may issue additional ordinary shares or ADSs for future acquisitions. Your ownership interest in our company would be diluted and this, in turn, could have a material adverse effect on the price of our ADSs.

Your right as a holder of ADSs to participate in any future rights offerings may be limited, which may cause dilution to your holdings and you may not receive cash dividends if it is impractical to make them available to you.

We may, from time to time, distribute rights to our shareholders, including rights to acquire our securities.  However, we cannot make any such rights available to our ADS holders in the United States unless we register such rights and the securities to which such rights relate under the Securities Act or an exemption from the registration requirements is available.  In addition, the deposit agreement provides that the depositary bank will not make rights available to you unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act or exempted from registration under the Securities Act.  We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective.  Moreover, we may not be able to establish an exemption from registration under the Securities Act.  Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

In addition, the depositary has agreed to pay you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses.  You will receive these distributions in proportion to the number of ordinary shares your ADSs represent.  However, the depositary may, at its discretion, decide that it is not lawful or practical to make a distribution available to any holders of ADSs.  For example, the depositary may determine that it is not practicable to distribute certain property through the mail, or that the value of certain distributions may be less than the cost of mailing them.  In these cases, the depositary may decide not to distribute such property and you will not receive such distribution.

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You may be subject to limitations on transfer of your ADSs.

Your ADSs are transferable on the books of the depositary.  However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties.  In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

As we are a Cayman Islands company, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.

Our corporate affairs are governed by our second amended and restated memorandum and articles of association, the Companies Law and the common law of the Cayman Islands.  The rights of our shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.  The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands, as well as that from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands.  The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States.  In particular, because Cayman Islands law has no legislation specifically dedicated to the rights of investors in securities, and thus no statutorily defined private causes of action to investors in securities such as those found under the Securities Act or the Securities Exchange Act of 1934 in the United States, it provides significantly less protection to investors.  In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the federal courts of the United States.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than would shareholders of a corporation organized in a jurisdiction in the United States.

You may have difficulties in enforcing judgments obtained against us.

We are a Cayman Islands company and substantially all of our assets are located outside of the United States.  Substantially all of our current operations are conducted in the PRC.  In addition, a majority of our directors and officers are nationals and residents of countries other than the United States and a substantial portion of the assets of these persons are located outside the United States.  As a result, it may be difficult for you to effect service of process within the United States upon these persons.  We have been advised by our Cayman Islands legal counsel, Maples and Calder, that the courts of the Cayman Islands are unlikely (i) to recognise or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the securities laws of the United States or any State, so far as the liabilities imposed by those provisions are penal in nature.  In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognise and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met.  For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or  obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).  A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.  There is recent Privy Council authority (which is binding on the Cayman Islands Court) in the context of a reorganisation plan approved by the New York Bankruptcy Court which suggests that due to the universal nature of bankruptcy/insolvency proceedings, foreign money judgments obtained in foreign bankruptcy/insolvency proceedings may be enforced without applying the principles outlined above.  However, a more recent English Supreme Court authority (which is highly persuasive but not binding on the Cayman Islands Court), has expressly rejected that approach in the context of a default judgment obtained in an adversary proceeding brought in the New York Bankruptcy Court by the receivers of the bankruptcy debtor against a third party, and which would not have been enforceable upon the application of the traditional common law principles summarised above and held that foreign money judgments obtained in bankruptcy/insolvency proceedings should be enforced by applying the principles set out above, and not by the simple exercise of the Courts’ discretion.  Those cases have now been considered by the Cayman Islands Court.  The Cayman Islands Court was not asked to consider the specific question of whether a judgment of a bankruptcy court in an adversary proceeding would be enforceable in the Cayman Islands, but it did endorse the need for active assistance of overseas bankruptcy proceedings.  We understand that the Cayman Islands Court’s decision in that case has been appealed and it remains the case that the law regarding the enforcement of bankruptcy/insolvency related judgments is still in a state of uncertainty.

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The voting rights of holders of ADSs must be exercised in accordance with the terms of the deposit agreement, the ADRs and the procedures established by the depositary.  The process of voting through the depositary may involve delays that limit the time available for you to consider proposed shareholders’ actions and may restrict your ability to exercise your right to vote.

As a holder of our ADSs, you may only be able to exercise the voting rights with respect to the underlying ordinary shares in accordance with the provisions of the deposit agreement.  Under the deposit agreement, if the vote is by show of hands, the depositary will vote the underlying ordinary shares in accordance with the voting instructions received from a majority of holders of ADSs that provided timely voting instructions.  If the vote is by poll, the depositary will vote the underlying ordinary shares in accordance with the voting instructions it timely receives from ADS holders.  Upon receipt of voting instructions of a holder of ADSs in the manner set forth in the deposit agreement, the depositary will endeavor to vote the underlying ordinary shares in accordance with these instructions.  Under our second amended and restated memorandum and articles of association and Cayman Islands law, the minimum notice period required for convening a general meeting is five days.  When a general meeting is convened, you may not receive sufficient notice of a shareholders’ meeting to permit you to withdraw your ordinary shares to allow you to cast your vote with respect to any specific matter.  In addition, the depositary and its agents may not be able to send voting instructions to you or carry out your voting instructions in a timely manner.  We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, but we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares.  Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote.  As a result, you may not be able to exercise your right to vote and you may lack recourse if the ordinary shares underlying your ADSs are not voted as you requested.

The depositary for our ADSs will give us a discretionary proxy to vote our ordinary shares underlying your ADSs if you do not vote at shareholders’ meetings, except in limited circumstances, which could adversely affect your interests.

Under the deposit agreement for the ADSs, if you do not vote, the depositary will give us a discretionary proxy to vote our ordinary shares underlying your ADSs at shareholders’ meetings unless:

·we have instructed the depositary that we do not wish a discretionary proxy to be given;

·we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;

·a matter to be voted on at the meeting would have a material adverse impact on shareholders; or

·the voting at the meeting is to be made on a show of hands.

The effect of this discretionary proxy is that if you do not vote at shareholders’ meetings, you cannot prevent our ordinary shares underlying your ADSs from being voted, except under the circumstances described above.  This may make it more difficult for shareholders to influence the management of our company.  Holders of our ordinary shares are not subject to this discretionary proxy.

We may be classified as a passive foreign investment company, which could result in adverse United States federal income tax consequences to United States Holders of our ADSs or ordinary shares.

Although it is not clear how the contractual arrangements between us and our PRC operating companies will be treated for purposes of the “passive foreign investment company,” or PFIC, rules, we do not believe we were a PFIC for United States federal income tax purposes for our taxable year ended December 31, 2014 based upon the composition of our income and assets and valuation of our assets, including goodwill.  However, the application of the PFIC rules is subject to ambiguity in several respects and, in addition, we must make a separate determination each year as to whether we are a PFIC after the close of each taxable year.  Because we expect to continue to hold a substantial amount of cash and other passive assets, and because the determination of whether we are a PFIC will depend on the character of our income and assets and the value of our assets from time to time, which may be based in part on the market price of our ADSs, which is likely to fluctuate, we cannot assure you that we will not be a PFIC for any future taxable year.  If we were to be treated as a PFIC for any taxable year during which a United States Holder held an ADS or an ordinary share, the United States Holder could be subject to adverse United States federal income tax consequences upon certain distributions and on gain recognized with respect to the disposition of an ADS.  In addition, a United States Holder may be subject to additional reporting requirements.  See “Item 10. Additional Information—E. Taxation—United States Federal Income Tax Consequences—Passive Foreign Investment Company.”

Our articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders’ opportunity to sell their shares, including ordinary shares represented by our ADSs, at a premium.

Our second amended and restated memorandum and articles of association include provisions that could limit the ability of others to acquire control of us, including provisions that authorize our board of directors, without action by our shareholders, to issue preferred shares and to issue additional ordinary shares, including ordinary shares represented by ADSs.  These provisions could have the effect of depriving you of an opportunity to sell your ADSs at a premium over prevailing market prices by discouraging third parties from seeking to acquire control of us in a tender offer or similar transactions.

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Item 4.             Information on the Company

A.            History and development of the Company

Our legal and commercial name is Jiayuan.com International Ltd. Our founder, Ms. Haiyan Gong, commenced our online dating business in 2003, focusing on highly educated users, such as college educated users or users who had received post-secondary education.  In April 2004, Ms. Gong incorporated Shanghai Huaqianshu, a PRC limited liability company, to operate our online dating service business.  Ms. Haiyan Gong and Mr. Fuping Yu each held 61% and 39% of the equity interests, respectively, in Shanghai Huaqianshu.

In June 2005, Ms. Haiyan Gong and Mr. Yongqiang Qian, through their wholly-owned companies, incorporated Flower Trees Limited, or Flower Trees, in the British Virgin Islands.  In January and February of 2006, Flower Trees established a wholly-owned PRC subsidiary, Souyuan (Shanghai) Information Technology Co., Ltd., or Souyuan, which entered into a series of contractual arrangements with Shanghai Huaqianshu and its shareholders to acquire effective control over Shanghai Huaqianshu.

In February 2007, Harper Capital Inc. was incorporated in the British Virgin Islands.  In March 2007, Ms. Haiyan Gong, Mr. Yongqiang Qian, Mr. Xu Liu and Ms. Jing Yang became the initial shareholders of Harper Capital Inc.  In May 2007, Harper Capital Inc. established a wholly-owned PRC subsidiary, Shanghai Miyuan.  In May 2007, Shanghai Miyuan entered into an assignment agreement with Souyuan, Shanghai Huaqianshu and its shareholders to assume Souyuan’s effective control over Shanghai Huaqianshu.  As a result, Flower Trees and Souyuan no longer hold any assets and have no operations.

In January 2008, we opened our registration to all single users above the age of 18 and in October 2008, we began charging fees for messaging services on our Jiayuan platform.

In preparation for our initial public offering, we incorporated Jiayuan in September 2010 in the Cayman Islands as our listing vehicle.  Jiayuan became our ultimate holding company on January 26, 2011 when it issued shares to the existing shareholders of Harper Capital Inc. in exchange for all of the outstanding shares of Harper Capital Inc. at an exchange ratio of one to one, or the Share Swap.  After the Share Swap, Harper became our direct wholly-owned subsidiary.  In addition, in October 2010, Harper established a wholly-owned subsidiary, Jiayuan Hong Kong.  Jiayuan Hong Kong may qualify for the PRC preferential tax treatment for dividend payments from PRC entities to certain shareholders that are Hong Kong resident enterprises.  See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Taxation—PRC—Withholding Tax.”

We also took the following steps:

·in December 2010, Shanghai Huaqianshu established Jiayuan Shanghai Center, a privately funded non-enterprise institution;

·in January 2011, Jiayuan Hong Kong established another wholly-owned PRC subsidiary, Beijing Miyuan, to enter into a series of contractual arrangements with Beijing Huaqianshu, Xique and their respective shareholders to acquire effective control over Beijing Huaqianshu and Xique.  We believe that establishing a wholly foreign-owned enterprise in Beijing will provide us with more organizational flexibility as our principal offices and many of our employees are located in Beijing.  Furthermore, given the highly-regulated nature of the Internet industry, we believe that our proximity to regulators in Beijing will become increasingly important as our business expands.  Beijing Miyuan commenced operations in 2013;

·in February 2011, Beijing Miyuan entered into a series of contractual arrangements with Beijing Huaqianshu, Xique and their respective shareholders to acquire effective control over Beijing Huaqianshu and Xique.  As a result, Beijing Huaqianshu and Xique became our variable interest entities.  Beijing Huaqianshu and Xique commenced operations in November 2010;

·in May 2011, Beijing Miyuan transferred and assigned its obligations and rights under the contractual arrangements with Beijing Huaqianshu, Xique and their respective shareholders to Shanghai Miyuan; and

·in May 2011, Harper Capital Inc.’s transfer of its 100% equity interest in Shanghai Miyuan to Jiayuan Hong Kong was approved by the Shanghai Yangpu District Municipal Commission of Commerce.

On May 16, 2011, we completed our initial public offering of 7,100,000 ADSs, every two ADSs representing three ordinary shares of par value US$0.001 per share. We listed our ADSs on the NASDAQ Global Select Market, or NASDAQ, on May 11, 2011.

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In August 2012, we established Beijing Aizhenxin Information Technology Co., Ltd., or Beijing Aizhenxin, in the PRC, and Beijing Miyuan entered into a series of contractual arrangements with Beijing Aizhenxin and its shareholders to acquire effective control over Beijing Aizhenxin.  As a result, Beijing Aizhenxin became one of our variable interest entities.  Beijing Aizhenxin commenced operations in October 2012.

On December 26, 2012, we completed the acquisition of certain assets of Beijing Juedui100, an online dating website operator, for a consideration of RMB5.5 million.  The assets we acquired include the domain names of www.juedui100.com and www.juedui100.com.cn and related trademarks, rights to any trademarks under pending applications and user database.

In March 2014, Shanghai Miyuan transferred and assigned its obligations and rights under the contractual arrangements with Shanghai Huaqianshu, Beijing Huaqianshu and Xique and their respective shareholders to Beijing Miyuan and the contractual arrangements with Shanghai Huaqianshu, Beijing Huaqianshu and Xique and their respective shareholders were amended and restated.

Our principal executive offices are located at 15/F, Anhua Development Building, No. 35 Anding Road, Chaoyang District, Beijing, the People’s Republic of China, and our telephone number is 86-10-6113-6600. Our registered office in the Cayman Islands is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 400 Madison Avenue, 4th Floor, New York, NY 10017.

Going private transaction

We received a preliminary non-binding proposal letter, dated March 3, 2015, from Vast Profit Holdings Limited, or Vast Profit, that proposes a “going-private” transaction involving the acquisition of all of our outstanding ordinary shares not already owned by Vast Profit at a price per share of US$3.58, or US$5.37 per American depositary share, in cash.  Our board of directors has formed a special committee of independent directors to consider the proposed “going-private” transaction.

B.            Business overview

We operate Jiayuan.com, the largest online dating platform in China.  As a pioneer in China’s online dating market, we are committed to addressing the dating and marriage needs of China’s rapidly growing urban singles population by providing trusted, effective platforms and superior user experiences.  The Jiayuan.com platform provides single adults with unique opportunities to meet, interact and form a long-term relationship aimed towards marriage.  Our website Jiayuan.com ranked first in terms of number of daily unique visitors and total time spent among all online dating websites in China in 2014, according to iResearch.

Our Jiayuan.com platform employs a results-based pricing model, which we believe distinguishes us from other online dating service providers.  Unlike dating websites that follow a subscription-based model, Jiayuan.com offers users free registration with immediate full search access to our database.  This feature engages new users in the site and entices them to begin exploring our database for potential companions.  Although the search capabilities and exploratory services are provided for free and our users are not required to pay to send an initial message to another user, either the sender or recipient must pay a RMB2.00 to RMB3.00 fee in order to unlock communications.  After the initial message is read, future communications between the same users are free on the Jiayuan.com platform. Our pricing strategy for the initial message is designed to reach and target the mass market with its affordability.  Given the nominal cost to unlock communications, we believe this feature of our business is recession-resistant and serves as a strong foundation of our revenue model.  Furthermore, for users who intend to send or who have received a large amount of initial messages, we offer various types of fee plans that include the option to send up to 200 initial readable messages per day or unlimited message reading during a specified subscription period.

We believe our Jiayuan.com platform’s results-based pricing model is more attractive to users because they only pay for the results and services that they can see and has been one of the key factors enabling us to attract and retain a large user base.  We believe most of our users are well-educated singles seeking long-term relationships aimed towards marriage.  Our large and attractive user base combined with our results-based fee structure and user-friendly interface have created what we believe is a superior user experience.  According to a survey conducted by iResearch in February 2012, our Jiayuan platform ranked first in customer satisfaction among our major competitors in China’s online dating industry.

We believe that our “世纪佳缘” (Shiji Jiayuan) brand, which is our Chinese name, has become the most well-known and trusted online dating brand in China.  On December 31, 2014, “世纪佳缘” (Shiji Jiayuan) was searched 50-times more often than “交友网站” (Jiao You Wang Zhan), a common term for “dating website” in Chinese, on Baidu.com.  Leveraging our brand and national recognition, we have attracted a critical mass of local users in not only first-tier cities, such as Beijing, Shanghai, Guangzhou and Shenzhen, but also in many second-tier cities across China.  We intend to continue expanding our user base into other second-tier and third-tier cities.  A large user base is a major attraction for new users because of the large number of potential companions available to each of our users at their preferred location.  We believe our localized critical mass on a national scale and well-regarded brand name are difficult for competitors to replicate and provide us with an important competitive advantage.

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In 2012, we launched our members-only website, izhenxin.com in connection with our segmentation strategy to provide busy singles a more focused and streamlined environment to search for marriage-minded partners. We believe it was the first online dating platform in China to provide a comprehensive information verification system. Using the information from the comprehensive information verification system, the izhenxin.com website provides each member with an initial “sincerity score.”  As members use the izhenxin.com website, our proprietary algorithm analyzes user behavior and adjusts members’ “sincerity scores” on a real-time basis. As of December 31, 2014, the izhenxin.com website had more than 711,000 verified members.

In December 2012, we acquired certain assets of Beijing Juedui100 relating to the online dating website juedui100.com.

In May 2013, we began offering our personalized matchmaking services in China. At the end of 2014, we had seven locations offering personalized matchmaking services through our own employees and 71 locations that offer the service through outsourced matchmakers.

In connection with furthering our segmentation strategy, in September 2013, we launched qiuai.com, an html-based mobile dating platform tailored to feature mobile users. Qiuai.com was developed specifically for users who have limited access to personal computers, or PCs, and includes core dating features supported by our proprietary matching algorithm. Adopting a subscription-based model to avoid micro-payments with relatively high operator billing costs, qiuai.com recorded more than 9.4 million registered users by the end of 2014.

In October 2013, we launched a limited beta testing of Qiuyuehui, an e-commerce app designed for users to send real gifts or pre-paid dinner invitations to initiate communications. The address of the recipients is kept private from the senders, which helps to ensure dating security for our users.

In October 2014, we completed the purchase of a 20% ownership in Wuhan Didi, a Chinese developer of “Love Note,” a mobile app for communications between lovers.

We accelerated the expansion of our personalized matchmaking services in 2014, with national coverage increasing from 30 locations in 25 cities at the beginning of 2014 to 78 locations in 59 cities by the end of 2014. Leveraging our online resources and the largest online database of Chinese singles, our personalized matchmaking services provide one-on-one search and matchmaking services for clients who prefer more personalized services, helping them save time in finding love and extending the reach to eligible potential companions..

We also continued to expand our business in events and others. Since 2008, we have hosted large scale social gatherings in cities throughout China to provide our users offline opportunities to meet in person.  At the end of 2014, we began to operate a membership dating club in Beijing where members can date or participate in offline dating services hosted at the club. Under this type of service, users pay a single-entry fee or periodic subscription fee to join. Fees for these services are collected upfront. Such offline events also promote our national brand name and benefit our online platform.

We started charging fees for messaging services provided on our Jiayuan.com platform in October 2008, and currently we derive most of our revenues from our online business.  We had an average of 5,668,840 monthly active user accounts in 2014, compared to 5,214,727 in 2013, representing an increase of 8.7%.  In 2014, the number of our average monthly paying user accounts was 1,510,919, compared to 1,339,258 in 2013, representing an increase of 12.8%.  We generated net revenues of RMB410.8 million, RMB492.6 million and RMB614.0 million (US$99.0 million) in 2012, 2013 and 2014, respectively.  We had net income of RMB58.9 million, RMB63.7 million and RMB20.1 million (US$3.2 million) in 2012, 2013 and 2014, respectively.  Excluding non-cash share-based compensation expenses, we had a non-GAAP net income of RMB72.3 million, RMB74.1 million and RMB29.7 million (US$4.8 million) in 2012, 2013 and 2014, respectively.

Our Services

Online Services

Jiayuan.com

Our Jiayuan platform provides single adults unique opportunities to meet, interact with one another and form a long-term relationship aimed towards marriage.  Our Jiayuan platform can be accessed through Internet browsers, wireless applications, desktop clients and WAP mobile browsers. After registering on our Jiayuan platform for free, users can post their own profiles and pictures and have those profiles and pictures viewed by other users for free.  In addition, users can also browse the profiles and pictures of other users, save their preferences and send messages to other users for free.  However, in order for the recipient to read the message, either the sender or the recipient must either pay a nominal fee to unlock communications between the two parties, or have a periodic subscription package.

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We began charging fees for messaging services on our Jiayuan platform in October 2008.  We have a results-based fee structure designed to allow users to purchase our fee-based services based on their success in contacting other users.  We offer the following two primary fee plans for our online dating services.

·Unlock Communications Fee.  Payment of our unlock communications fee allows a user to connect with one other user for RMB2.00 to RMB3.00.  While a user initiates contact by sending a message to another user free-of-charge, either the sender or the recipient must pay the fee in order for the recipient to be able to read the message.  Once the first message is sent and read, the sender and the recipient can continue to communicate with each other through our Jiayuan platform without additional fees.  Users can also purchase a single virtual stamp for RMB2.00 or RMB3.00, or purchase a set of virtual stamps to unlock communications.  We also give users free stamps when they provide additional biographical information or pictures to encourage them to explore and utilize our messaging services.

·Periodic Subscription Fees.  Users can also pay for periodic subscriptions that allow them to send up to a maximum of 200 messages per day, or read an unlimited number of messages during the duration of the subscription period.  For sending messages, we offer monthly, three-month, six-month and annual subscription plans.  For reading messages, we offer monthly, three-month, six-month and annual subscription plans.  Periodic subscription fees also include “diamond memberships,” which allow a user unlimited access to send and read messages as well access to enhanced features under our value-added service “VIP memberships” and are available in monthly, three-month, six-month and annual plans. Monthly plans are also available for online chatting.  As part of our strategy to improve monetization and enhance user experience, we consistently evaluate the pricing of our periodic subscription fees and have implemented new packages priced above current subscription products.

Our Jiayuan platform offers a number of fee-based value-added services.  These value-added services primarily include purchasing virtual gifts for another user, improving one’s search ranking, priority rankings for sent messages, online chatting and premium display of their pictures and profile on our platform.  Users can also submit proof of information posted on their profiles so that other users will know they have submitted such information to us.

Our value-added services also include “VIP memberships.” “VIP memberships” are an improved version of our previous “advanced memberships” subscription and allow a user access to enhanced features on our platform such as customizing their profiles, seeing the users who have viewed their user profile, seeing the time of another user’s last log-in and more refined profile searches and are available in monthly, three-month, six-month and twelve-month plans.

We also offer web-based games and mobile games under an item-based revenue model where the basic game play functions are free of charge and players are charged for purchases of in-game virtual items or game points.  For web-based games, we cooperate with third-party game developers by entering into cooperation agreements with them. The web-based games designed, developed and hosted by these developers are made available to the players through our Jiayuan platform. We generally collect payments from players in connection with the sale of in-game virtual items and remit certain agreed-upon percentages of the proceeds to the game developers and record revenue net of such remittances.  For mobile games, we are primarily responsible for the operation and selling of game points to players through third party mobile application stores. The mobile application stores remit the proceeds to us after deducting certain agreed-upon percentages of commission fees.

Izhenxin.com

Our izhenxin.com platform gives marriage-minded singles a simple members-only platform in which to interact.  Izhenxin.com is based on Jiayuan’s industry-leading technology and includes enhanced verification and user behavior analysis methodologies to improve both user experience and matching results. Izhenxin.com is a subscription-based platform and users can subscribe to three-day, one-month, three-month and six-month periodic subscription packages. We launched the Android application for izhenxin.com in May 2014, followed by an iOS version in October 2014.

Qiuai.com

We commenced open beta testing for qiuai.com in September 2013, a mobile dating platform optimized for mobile browsers and WAP platforms. Qiuai.com was developed specifically for users who have limited access to PCs. Qiuai.com is free to register and to browse profiles, but male users are required to pay a daily, monthly, three-month or annual subscription fees to read and send messages, while female users can send unlimited messages for free. Qiuai.com also offers value-added services such as virtual gifts and VIP memberships that allow male users to view additional photos beyond the profile thumbnail photo. We generate advertising revenue from Qiuai.com. As of the end of 2014, qiuai.com recorded more than 9.4 million registered user accounts.

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Personalized Matchmaking Services

Our personalized matchmaking services, which we previously referred to as VIP services, consist of special, personalized services where our service representatives take a proactive approach in finding potential companions for our personalized matchmaking clients.  Depending on the needs of the clients, we provide tailor-made recommendations, conduct detailed background checks and provide dating and relationship consultation and advice.  Our personalized matchmaking services also include placement of targeted advertisements on our platform and arrangement of face-to-face interviews of potential companions on behalf of our clients.  We also host personalized offline matchmaking events where our personalized matchmaking clients can meet pre-selected candidates at cocktail gatherings or outdoor trips. We usually collect fees upfront when contracts are signed for the personalized matchmaking service engagement.  We occasionally will allow personalized matchmaking clients to pay within one month from when the personalized matchmaking service contract is signed.

We expanded our personalized matchmaking services at an accelerated pace since 2013 by leveraging our proprietary customer relations management, or CRM, system, which enables better resource management and allows greater scalability. We developed the business from 30 locations in 25 cities in the fourth quarter of 2013 to 78 locations in 59 cities by the end of 2014. The CRM system allows us to expand our coverage through an outsourcing model, by which we cooperate with local partners leveraging on their local physical presence, experience and management team while allowing them to use Jiayuan’s brand name and limited access to our online resources. Under this outsourcing model, service contracts are signed between Jiayuan and the clients receiving the personalized matchmaking services and such clients also pay directly to Jiayuan. At the end of the 2014, we had 71 out of 78 locations offering personalized matchmaking services through such matchmaking agencies. The number of locations providing matchmaking services increased from 30 locations in 25 cities at the end of 2013 to 78 locations in 59 cities at the end of 2014. At the end of 2014, Jiayuan’s personalized matchmaking locations employed 2,124 matchmakers, compared to 498 matchmakers at the end of 2013.

Events and Others

We organize and host events that allow individuals to meet a large number of potential partners in person.  In 2014, our events were typically large gatherings of approximately 100 to 200 participants with activities designed to facilitate social interaction.  These events include speed-dating, dance parties and other social events for our users.  In 2014, we organized a total of  653 offline events in 79 cities across China.  Attendance is free-of-charge for events where we obtain event sponsorship advertising. For non-sponsored events, we typically collect entry fees at the commencement of the event.

At the end of 2014, we began to operate a membership dating club in Beijing where members can date or participate in offline dating services hosted at the club. Under this type of service, users pay a pay-per-use fee or periodic subscription fee to join. Fees for these services are collected upfront.

Other services consist primarily of online advertising placed on our websites.

User Base

We have a large and active user base on our online dating platforms, consisting primarily of users indicating they are seeking serious relationships and marriage. On Jiayuan.com and izhenxin.com, we actively discourage users who are not looking for a serious relationship from using our services.  The primary categories we use to track our users are active user accounts, paying user accounts, average monthly revenue per paying user, or ARPU, and registered user accounts.

Our average monthly active user accounts were 5,214,728 in 2013 and 5,668,840 in 2014.  The average percentage of monthly active user accounts that were paying user accounts in 2014 was approximately 26.7%, compared to 25.7% over the corresponding period in the prior year.  In December 2014, 70.6% of our active user accounts were between the ages of 18 to 35, inclusive, and 83.0% of our active user accounts had some post-secondary education, both as reported by our users.  In addition, there were 177 cities in China in which we had at least 10,000 active user accounts in the first quarter of 2015.

We have an active and engaged user base.  In the three months ended December 31, 2014, an average of 1,879 users per day changed their relationship status to “currently dating someone” or “in a relationship” on their Jiayuan profile on our Jiayuan.com platform.  Our monthly paying user accounts increased from an average of 1,224,890 in 2012 and to an average of 1,339,258 in 2013 and increased further to an average of 1,510,919 in 2014.  We generate revenue by converting active user accounts into paying user accounts and by encouraging our users to purchase more services.  Our average monthly ARPU for online services in 2014 was RMB22.6.

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Our personalized matchmaking clients are often busy professionals that are existing Jiayuan.com registered users who we have converted to paid matchmaking clients. Participants in our offline events are primarily also users of our online dating services.

Operations

Online Security Measures

We emphasize maintaining a serious and reliable online dating environment on Jiayuan.com and izhenxin.com and high satisfaction levels among our user experience on all of our platforms.  To that end, we have taken a number of steps to promote responsible and appropriate behavior among our users, establish user participation guidelines and disclaimers and allow telephone access to customer service representatives to address user concerns. In particular, we continued to upgrade our online intelligent security system in 2014 to monitor and discourage unhealthy user behavior on a more timely and effective basis.

Information Verification.  We encourage users to provide proof of personal information such as proof of age, income and education level.  Users who provide proof of personal information are given a higher rating in our database.  Subsequent to registration, we do not allow users to improve certain basic personal information they previously provided such as height, salary and education level without verification.

User Feedback.  We ask users to alert our user support representatives as to other users who are suspected of violating our policies, such as users who are not committed to seeking a long-term relationship or who provide false personal information.

Black List.  If users behave inappropriately through our platforms, we will move such offenders to a “black list” and restrict their access to our databases and their ability to send messages through our platforms, even if they are paying users.

Key Word Screening.  We use proprietary computer algorithm to screen messages for offensive words and phrases and advertising as well as words and phrases that may indicate that a member is not otherwise seeking a serious relationship. When words and phrases in these categories are flagged, a user service representative reviews the message.  If the message violates our policies, the sender is put on our “watch list.” Repeat offenders are moved to our black list.

User Behavior Screening.  We use a proprietary computer algorithm to monitor for abnormal user behavior that may indicate that a member is not otherwise seeking a serious relationship.  When improper log-in, browsing or messaging behavior is detected, the user is flagged for review by a user service representative, who reviews the user activity and decides whether to move the user to the black list.

Cautionary Messages.  We post various cautionary messages on our platforms about the potential dangers of meeting people in an online environment and the precautions that a user should take when meeting other users in-person. On our platforms, we encourage our users to message users whose profiles have been verified each time they view profiles of unverified users. We also encourage our users to indicate their willingness to show their identity when they meet other users offline for the first time, and we will highlight the users who are willing to do so with a symbol below their profile photo and Jiayuan ID.

Payment Channels

We provide users of our online dating services the flexibility to choose from a number of payment options.  Payment options include online banking, online payment, wire transfer, postal remittance, prepaid cards and cash.  Many of our customers prefer online banking and online payment.  For online payment, we typically collect through nationally recognized payment processing agents and receive the fees within 48 hours.  We pay a percentage of the proceeds to these agents as commission.  Our agreements with the independent payment processing agents are generally for terms of one year.

Users can also pay for these services through mobile carriers.  For users who pay through mobile carriers, we will receive payments through our WVAS partners.  We do not bill users who pay for our services directly through their mobile phones.  Instead, we estimate revenue and cost of revenue based on internal billing records and adjust our revenue based on billing statements and fees remitted to us by our WVAS partners.  See “Item 3.  Key Information.  D. Risk Factors—Risks Relating to Our Business—We are required to estimate a portion of our reported revenues and cost of revenues at period-end, which may require subsequent adjustments to our financial statements.”

User Support

Our user support team operates 24 hours a day, seven days a week.  As of December 31, 2014, we employed a total of 95 full-time and 26 part-time user support representatives.  Our team of user support representatives helps users with matters such as completing profile descriptions and personal essays and choosing photos for their profiles, as well as answering questions about billing and technical issues.  Our user support team also reviews new and updated profiles and plays an integral role in implementing our online security measures. User support representatives receive ongoing training in an effort to better personalize the experience for users that call in.

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Marketing

We employ a variety of marketing and recruiting methods to attract users.  We believe that users have been attracted to our Jiayuan platform due to our excellent brand name, the quality of the online experience we offer, our large user base and our leading position in the industry.  Our user experience helps us to market through word-of-mouth and increases the time that users spend on our platforms.  We also engage in a variety of marketing activities intended to drive traffic to our platforms and to allow us to introduce our services to prospective users.  These include the following online marketing activities:

·Paid search.  We utilize various popular search engines in China.  We pay for keywords or phrases relevant to our business and services so that when users search for these keywords or phrases on these search engines they will be directed to our platforms.

·Banner and other display advertising.  We conduct marketing campaigns online through the use of banner and other display advertising on navigation websites, Internet portals and other specialized websites.

·Co-branded dating channels. We operate co-branded dating channels on third party websites. The dating channels feature user profiles from Jiayuan’s user base and all activities by such users on the dating channels are redirected to Jiayuan’s main website.

We also engage in a variety of marketing activities targeting users that access our platforms through their wireless handsets, including advertising through WAP portals, application download stores and in-app advertising.

We have also initiated various offline marketing activities to further promote our brand awareness among existing and potential users.  For example, we market our services through direct marketing, trade shows and other media events, which include:

·hosting or attending various public relations events, such as industry-related seminars and conferences, to promote our brand image and the value of online personal services;

·hosting large-scale offline events for our users; and

·picking and highlighting unique couples that met through our platforms and promoting their personal stories as “success stories” on our platforms.

In addition, we benefit from cross-promotional arrangements with third-party websites and television stations, under which we cooperate to help improve each other’s brand recognition.  We have collaborated with approximately 100 national and regional television shows as well as major Internet portals.  To enhance our market penetration, especially among working professionals, we also advertise in subway stations.

Intellectual Property

Intellectual property rights, including copyrights, trademarks, domain names and trade secrets, are important to our success.  We rely on a combination of trademark, copyright and trade secret laws in China as well as confidentiality procedures and contractual provisions to protect our proprietary technology, our brand and our domain name.

Employment agreements with our employees typically contain confidentiality and invention assignment provisions, assigning to us the intellectual property rights in the platform, designs, business documents, tools and other relevant work generated by them as a result of performing their employment duties or using our resources while they are employed with us.  We also provide regular training to our employees regarding procedures that should be taken to protect our intellectual property, including information relating to our users.

We have registered 79 trademarks, including “世纪佳缘” (Shiji Jiayuan), “花千树” (Huaqianshu), “jiayuan.com” , “爱真心” (Aizhenxin), “绝对100”(Juedui100) and “求爱”(Qiuai) in the PRC and three trademarks abroad in Hong Kong, Taiwan and the United States.  We have also registered 76 domain names relating to our web sites, including www.jiayuan.com, the primary URL for our online dating platform, www.izhenxin.com, the primary URL for our members-only online dating platform, www.juedui100.com, the primary URL for our newly-acquired online dating platform and www.qiuai.com. We obtained the trademark registration for the “世纪佳缘”(Shiji Jiayuan) trademark and certain of our other trademarks for dating and marriage agency services in 2014.

We believe that our confidentiality procedures and contractual provisions adequately protect our intellectual property rights, and avoid infringing or potentially infringing activities, minimize our exposure to third-party claims and protect our reputation as a company.  Despite our efforts, it may be possible for third parties to obtain and use our intellectual property without authorization, or challenge our intellectual property rights.  See “Item 3.  Key Information.  D. Risk Factors—Risks Relating to Our Business—If we are unable to protect our Internet domain names or proprietary rights upon which our business relies or avoid claims that we infringe upon the proprietary rights of others, our profitability may be materially and adversely affected.”

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Competition

The online dating market in China is rapidly developing and there are currently few barriers to entry for potential competitors to set up online dating websites.  We compete with a number of different companies, both large and small, including vertically integrated Internet portals and specialty-focused media companies, that provide online and offline products and services similar to ours and that target the markets we serve.  Our principal competitors include Baihe.com and Zhenai.com, both of which operate online dating platforms.  We compete directly with online dating service providers such as Baihe.com, Zhenai.com and Youyuan.com.  We also compete with portals and classifieds websites that operate online dating sub-channels, such as 163.com, Ganji.com and 58.com.  In addition, we face competition from Internet portals and social networking websites such as Sina.com.cn, Sohu.com, QQ.com, Renren.com and Kaixin001.com, including applications on wireless devices from QQ.com, WeChat and Momo.  Due to the global accessibility of the Internet and because of the strong and growing demand for online dating services in China, we also face competition from overseas operators of online dating services and other foreign Internet companies.  There are also numerous other companies offering online dating services that compete with us that are smaller, less established and not as well known.

We also face competition from traditional offline dating service providers, such as matchmaking agencies, personal sections of newspapers and magazines and other conventional media companies that provide dating services.

We believe that the primary competitive factors in creating a successful online community focused on providing serious dating opportunities are functionality, brand recognition, having a critical mass of users, user affinity and loyalty, ease-of-use, quality of service and reliability.  Though the barriers to entry in setting up online dating websites are low, we believe it is difficult for new entrants to successfully compete because of the competitive factors listed above.

Legal Proceedings

We may be subject to legal proceedings, investigations and claims relating to the conduct of our business from time to time.  We may also initiate legal proceedings in order to protect our contractual and property rights.  We are not currently a party to, nor are we aware of, any legal proceeding, investigation or claim which, in the opinion of our management, is likely to have a material adverse effect on our business, financial condition or results of operations.

Regulation

Regulation on Marriage Agency Business

The PRC has not adopted a unified and specific regulatory framework governing our business, except that no marriage agency or individual is permitted to engage in international marriage agency services by any means in accordance with the Circular regarding Further Strengthening the Administration of International Marriage Agency Activities issued by the General Office of the State Council on December 6, 1994.

However, certain local governments have promulgated regulations and rules in relation to marriage agencies or marriage agency services.  For example, the Shanghai Municipal Government promulgated the Administrative Measures on Shanghai Marriage Agencies, or the Shanghai Marriage Agency Measures, on December 28, 2001 and subsequently amended these measures on June24, 2004.  Pursuant to the Shanghai Marriage Agency Measures, commercial marriage agencies are required to obtain a business license specifically including “marriage agency services” in its business scope from the relevant administrative authority for industry and commerce, while non-commercial marriage agencies are required to register with the local branch of the Ministry of Civil Affairs as a privately funded non-enterprise institution and obtain a registration certificate in accordance with the Interim Regulations on the Administration of the Registration of Privately Funded Non-enterprise Institutions , before commencing any marriage agency services.  A privately funded non-enterprise institution may not engage in profit-making business operations, and lawful income accrued from their activities can only be used for business operations prescribed by its articles of association, and is prohibited from being distributed to its sponsor.  In addition, marriage agencies are required to verify the evidence provided in relation to the marriage status as well as other personal information provided by the customer and shall decline to accept or publish any marriage advertisement in the event that the customer provides false or fake proofs.

We offer offline personalized matchmaking services to certain of our clients in China, which may be deemed as a type of marriage agency services.  Currently, we provide the offline personalized matchmaking services mainly through Jiayuan Shanghai Center, a privately funded non-enterprise entity under the supervision of the Shanghai Yangpu District Bureau of Civil Affairs, Beijing Huaqianshu and Shanghai Huaqianshu’s Beijing branch.  To comply with the above laws and regulations, the business scope of these entities includes marriage agency services.

Regulation on Foreign Investment Industry Catalogue

The Catalogue for the Guidance of the Foreign Investment Industries (2015) jointly promulgated by the National Development and Reform Commission and the Ministry of Commerce classifies industry sectors into four categories for the purpose of guiding foreign investment, namely the “encouraged”, “permitted”, “restricted” and “forbidden” categories, among which, the “encouraged”, “restricted” and “forbidden” categories are specified in the Catalogue for the Guidance of the Foreign Investment Industries (2015) while an industry that is not specifically placed into one of the above three categories falls into the category of “permitted” industries.  Pursuant to the Catalogue for the Guidance of the Foreign Investment Industries (2015), value-added telecommunications services businesses (excluding electronic commerce business) are listed within the restricted category.  Businesses falling within the restricted category of foreign investments are those that are subject to a stricter approval process or other conditions, such as restrictions on foreign investment ratios or stricter requirements on the qualification of foreign shareholders.  Direct foreign investment in these businesses, however, is not prohibited by PRC law.  The provision of online dating services by our PRC operating companies is a type of Internet-based business supported by value-added telecommunications services and thus, pursuant to the Catalogue for the Guidance of the Foreign Investment Industries (2015), falls in the restricted category whereby foreign ownership cannot exceed 50% of the total investment. In addition, the operation of online games is classified as Internet publishing activities and Internet cultural operations and therefore falls into the “forbidden” category under the Catalogue for the Guidance of the Foreign Investment Industries (2015), whereby foreign investment are prohibited.  Hence, to comply with these provisions, we conduct our online dating services business and online gaming business principally through contractual arrangements between Beijing Miyuan and our PRC operating companies and their respective shareholders instead of directly owning equity interest in our PRC operating companies.

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Regulation on Telecommunications and Internet Information Services

The telecommunications industry, including the Internet sector, is highly regulated in the PRC.  Regulations issued or implemented by the State Council, the Ministry of Industry and Information Technology, or MIIT (formerly the Ministry of Information Industry, or MII), and other relevant government authorities cover many aspects of operation of telecommunications and Internet information services, including entry into the telecommunications industry, the scope of permissible business activities, licenses and permits for various business activities and foreign investment.

The principal regulations governing the telecommunications and Internet information services that we provide in the PRC include:

·Telecommunications Regulations (2014, revised), or the Telecom Regulations.  The Telecom Regulations categorize all telecommunications businesses in the PRC as either basic or value-added services.  Value-added telecommunications services are defined as telecommunications and information services provided through public network infrastructures.  The “Catalog of Telecommunications Business,” an attachment to the Telecom Regulations and updated by the MII’s Notice on Adjusting the Catalog of Telecommunications Business effective from April 1, 2003, categorizes various types of telecommunications and telecommunications-related activities into basic or value-added telecommunications services, according to which, Internet information services, or ICP services, are classified as value-added telecommunications businesses.  Under the Telecom Regulations, commercial operators of value-added telecommunications services are required to first obtain an operating license for value-added telecommunications services, or the ICP License, from the MIIT or its provincial level counterparts.

·Administrative Measures on Internet Information Services (2011, revised), or the Internet Measures.  According to the Internet Measures, a commercial ICP service operator must obtain an ICP License from the relevant government authorities before engaging in any commercial ICP service within the PRC.  When the ICP service involves areas of news, publication, education, healthcare, pharmaceuticals, medical equipment and other industries and if required by laws or relevant regulations, prior approval from the respective regulating authorities must be obtained prior to applying for the ICP License from MIIT or its local branch at the provincial level.  Moreover, an ICP service operator must display its ICP License number in a conspicuous location on its website and must monitor its website to remove categories of harmful content that are broadly defined.

·Administrative Measures for Telecommunications Business Operating License (2009, revised), or the Telecom License Measures.  The Telecom License Measures set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses.  For example, an ICP service operator conducting business within a single province is required to apply for the ICP License from the MIIT’s applicable provincial level counterpart while an ICP service operator providing ICP services across provinces is required to apply for Trans-regional ICP License directly from MIIT.  An ICP service operator that has been granted the Trans-regional ICP License is required to file a record with the local branch of MIIT at the provincial level prior to conducting any value added telecommunications business in such provinces.  The appendix to the ICP License is required to detail the permitted activities to be conducted by the ICP service operator.  An approved ICP service operator is required to conduct its business in accordance with the specifications recorded on its ICP License.  The ICP License is subject to annual review and the annual review result will be recorded as an appendix to the ICP License, published to the public and notified to the applicable administrative authority for industry and commerce.

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·Detailed Rules on the Administration of Internet Websites (2005), which set forth that a website operator is required to apply for the ICP filing from the MIIT or its local branches at the provincial level on its own or through the access service provider.

·Regulations for Administration of Foreign-Invested Telecommunications Enterprises (2008, revised), or the FITE Regulations.  The FITE Regulations set forth detailed requirements with respect to, among others, capitalization, investor qualifications and application procedures in connection with the establishment of a foreign-invested telecommunications enterprise.  Under the FITE Regulations, a foreign entity is prohibited from owning more than 50% of the total equity interest in any value-added telecommunications service business in the PRC and the major foreign investor in any value-added telecommunications service business in the PRC is required to have good track record in such industry.

·Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business (2006).  Under this circular, a domestic PRC company that holds an ICP License is prohibited from leasing, transferring or selling the ICP License to foreign investors in any form, and from providing any assistance, including providing resources, sites or facilities, to foreign investors that conduct value-added telecommunications business illegally in the PRC.  Further, the domain names and registered trademarks used by an operating company providing value-added telecommunications service are required to be legally owned by such company and/or its shareholders.  In addition, such company’s operation premises and equipment should comply with its approved ICP License, and such company should establish and improve its internal Internet and information security policies and standards and emergency management procedures.

·Measures for the Administration of Commercial Website Filings for Record (2004).  Under these measures, commercial websites operated by ICP service operators registered in Beijing must: (i) file with the Beijing Administration of Industry and Commerce and obtain electronic registration marks; and (ii) place the registration marks on their websites’ homepages.

·Provisions on Administration of Internet User Account Names (2015).  Under these provisions,  Internet information service providers shall, pursuant to the principle of “mandatory real name registration at the back-office end, and voluntary real name display at the front-office end,” require users to pass an identity authentication process prior to creating an account.

To comply with these PRC laws and regulations, we operate our value-added telecommunications business through Shanghai Huaqianshu, Beijing Huaqianshu, Beijing Aizhenxin and Xique.  Shanghai Huaqianshu owns the essential domain names and trademarks and holds an ICP License in relation to our value-added telecommunications business on our Jiayuan.com website. Beijing Huaqianshu owns the essential domain names and is in the process of registering the relevant trademarks and holds an ICP License in relation to our value-added telecommunications business on our imdali.com website. Shanghai Huaqianshu owns the essential domain name, Beijing Miyuan owns the trademark and Beijing Huaqianshu holds an ICP License in relation to our value-added telecommunications business on our juedui100.com website. Beijing Aizhenxin owns the essential domain names and trademarks and holds an ICP License in relation to our value-added telecommunications business on our izhenxin.com website. Xique is in the process of registering the relevant trademarks and holds an ICP License in relation to value-added telecommunications business on Xique.com and qiuai.com websites.

Under various laws and regulations governing ICP services, ICP services operators are required to monitor their websites.  They may not produce, duplicate, post or disseminate any content that falls within the prohibited categories and must remove any such content from their websites, including any content that:

·opposes the fundamental principles determined in the PRC’s Constitution;

·compromises state security, divulges state secrets, subverts state power or damages national unity;

·harms the dignity or interests of the State;

·incites ethnic hatred or racial discrimination or damages inter-ethnic unity;

·sabotages the PRC’s religious policy or propagates heretical teachings or feudal superstitions;

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·disseminates rumors, disturbs social order or disrupts social stability;

·propagates obscenity, pornography, gambling, violence, murder or fear or incites the commission of crimes;

·insults or slanders a third-party or infringes upon the lawful rights and interests of a third-party; or

·includes other content prohibited by laws or administrative regulations.

The PRC government may shut down the websites of ICP License holders that violate any of such content restrictions and requirement, revoke their ICP Licenses or impose other penalties pursuant to applicable law.

Regulation of Online Cultural Activities and Online Games

The MOC promulgated the Provisional Regulations for the Administration of Online Games on June 3, 2010, the Provisional Measures on Administration of Internet Culture on February 17, 2011 and the Notice on Issues Relating to Implementing the Newly Amended Provisional Measures on Administration of Internet Culture on March 18, 2011. Pursuant to these regulations and notices, an entity that intends to commercially engage in the production, duplication, import, distribution, broadcasting, publication, exhibition or contest related to online cultural products, including online games, is required to obtain an Online Culture Operating Permit from the applicable provincial level culture administrative authority. Game operators are further required to file separate applications for issuance of virtual currencies and trading. In addition, in relation to virtual currencies trading, game operators can only issue virtual currencies in exchange of service they provide themselves rather than trading for services or products of third parties. Game operators cannot appropriate advance payments from players. Game operators are not allowed to provide trading services of virtual currency to minors. Records of all transactions in the accounts must be kept for minimum 180 days.

Pursuant to the Tentative Measures on Internet Publication, or the Internet Publication Measures, jointly promulgated by MII and GAPP and effective on August 1, 2002, Internet publishers must secure approval, or the Internet Publication License, from GAPP to conduct Internet publication activities, including operation of online games.

On September 28, 2009, GAPP and the National Office of Combating Pornography and Illegal Publications jointly published a circular, under which foreign investors are restricted from controlling and participating in the operation of online game services provided by domestic companies in any form, including entering into relevant agreements or providing technical support. This notice further states that all online games must be screened by GAPPRFT through advanced approvals before they are made available online, and any updated online game versions or any change to the online games are subject to further approvals before they can be made available online.

Shanghai Huaqianshu is currently operating our online games business. Shanghai Huaqianshu has been granted the Online Culture Operating Permit to operate online games.  However, Shanghai Huaqianshu is still in the process of filing applications for issuance of virtual currencies and applying for the Internet Publication License. For more information regarding regulatory risks of our online games business, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—If we fail to obtain or maintain all applicable permits and approvals, or fail to comply with PRC regulations, relating to online games, our ability to conduct our online game business and certain other businesses could be affected and we could be subject to penalties and other administrative sanctions.”

Regulation on Internet Privacy

The PRC Constitution states that PRC law protects the freedom and privacy of communications of citizens and prohibits infringement of such rights.  In recent years, PRC government authorities have enacted legislation on Internet use to protect personal information from any unauthorized disclosure.  The Internet Measures prohibit an ICP service operator from insulting or slandering a third party or infringing upon the lawful rights and interests of a third party.  Under the Several Provisions on Regulating the Market Order of Internet Information Services, issued by the MIIT in 2011, an ICP operator may not collect any user personal information or provide any such information to third parties without the consent of a user. An ICP service operator must expressly inform the users of the method, content and purpose of the collection and processing of such user personal information and may only collect such information necessary for the provision of its services. An ICP service operator is also required to properly keep the user personal information, and in case of any leak or likely leak of the user personal information, the ICP service operator must take immediate remedial measures and, in severe circumstances, to make an immediate report to the telecommunications regulatory authority. In addition, pursuant to the Decision on Strengthening the Protection of Online Information issued by the Standing Committee of the National People’s Congress in December 2012 and the Order for the Protection of Telecommunication and Internet User Personal Information issued by the MIIT in July 2013, any collection and use of user personal information must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified purposes, methods and scopes. An ICP service operator must also keep such information strictly confidential, and is further prohibited from divulging, tampering or destroying of any such information, or selling or proving such information to other parties. Any violation of the above decision or order may subject the ICP service operator to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, closedown of websites or even criminal liabilities.

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Regulation on Advertising Business

The State Administration for Industry and Commerce, or the SAIC, is the government agency responsible for regulating advertising activities in the PRC.  Regulations governing advertising business mainly include:

·Advertisement Law promulgated by the Standing Committee of the National People’s Congress on October 27, 1994 and went into effect on February 1, 1995;

·Administrative Regulations for Advertising promulgated by the State Council on October 26, 1987 and went into effect on December 1, 1987; and

·Implementation Rules for the Administrative Regulations for Advertising promulgated by the State Council on January 9, 1988, and amended on December 3, 1998, December 1, 2000, November 30, 2004 and December 12, 2011, respectively.

According to the above regulations, companies that engage in advertising activities must obtain from SAIC or its local branches a business license which specifically includes operating an advertising business within its business scope.  An enterprise engaging in advertising business as specified in its business scope does not need to apply for an advertising operation license, provided that such enterprise is not a radio station, television station, newspaper or magazine publisher or any other entity as specified in laws or administrative regulations.  Enterprises conducting advertising activities without such a license may be subject to penalties, including fines, confiscation of advertising income and orders to cease advertising operations.  The business license of an advertising company is valid for the duration of its existence, unless the license is suspended or revoked due to a violation of any relevant law or regulation.  PRC advertising laws and regulations set forth certain content requirements for advertisements in the PRC including, among other things, prohibitions on false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest.  Advertisers, advertising agencies, and advertising distributors are required by PRC advertising laws and regulations to ensure that the content of the advertisements they prepare or distribute is true and in full compliance with applicable law.  In providing advertising services, advertising operators and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify that the content of the advertisements complies with applicable PRC laws and regulations.  Prior to distributing advertisements that are subject to government censorship and approval, advertising distributors are obligated to verify that such censorship has been performed and approval has been obtained.  Violation of these regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information.  In circumstances involving serious violations, SAIC or its local branches may revoke violators’ licenses or permits for their advertising business operations.

Regulation on Information Security and Censorship

Several legislations have been enacted to regulate the information security and censorship conducts in relation to the Internet sector.  These legislations specifically prohibit the use of Internet infrastructure where it may breach public security, provide content harmful to the stability of society or disclose state secrets.  According to these legislations, it is mandatory for Internet companies in the PRC to complete security filing procedures and regularly update information security and censorship systems for their websites with the local public security bureau.  In addition, the newly amended Law on Preservation of State Secrets which became effective on October 1, 2010 provides that whenever an Internet service provider detects any leakage of state secrets in the distribution of online information, it should stop the distribution of such information and report to the authorities of state security and public security.  As per request of the authorities of state security, public security or state secrecy, the Internet service provider should delete any contents on its website that may lead to disclosure of state secrets.  Failure to do so on a timely and adequate basis may subject the Internet service provider to liability and certain penalties given by the State Security Bureau, the Ministry of Public Security and/or MIIT or their respective local counterparts.

As Shanghai Huaqianshu, Beijing Huaqianshu, Beijing Aizhenxin and Xique are ICP operators, they are subject to the laws and regulations relating to information security and censorship.  We have completed the mandatory security filing procedures with the local public security authorities, and will regularly update our information security and content-filtering systems with newly issued content restrictions as required by the relevant laws and regulations.

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Regulation on Intellectual Property Rights

Copyright Law

Under the Copyright Law (1990), as revised in 2001 and 2010, and its related Implementing Regulations (2002) , as revised in 2013, creators of protected works enjoy personal and property rights, including, among others, the right of dissemination via information network of the works.  The term of a copyright, other than the rights of authorship, alteration and integrity of an author which is unlimited in time, is life plus 50 years for individual authors and 50 years for corporations.

To address copyright issues relating to the Internet, several regulations, rules and interpretations were adopted by the PRC government and the PRC Supreme People’s Court.  Pursuant to these regulations, rules and interpretations, Internet service providers are required to bear joint liability with the infringer if they participate, assist or abet in infringing activities committed by any other person through Internet, are aware of the infringing activities committed by their website users through Internet or fail to remove infringing content or take other action to eliminate infringing consequences after receiving warning with evidence of such infringing activities from the copyright holder.  In addition, where an ICP service operator is clearly aware of the infringement of certain content against other’s copyright through the Internet or if the ICP service operator is aware of such infringement but fails to take measures to remove relevant contents upon receipt of the copyright owner’s notice, and as a result damages public interests, the ICP service operator could be subject to an order to stop the tortious act and other administrative penalties such as confiscation of illegal income and fines.

Furthermore, an ICP service provider may be exempted from indemnification liabilities under certain circumstances.  For instance, any ICP service provider, who provides automatic Internet access service upon instructions of its users or provides automatic transmission service of works, performance and audio-visual products provided by its users, will not be required to assume the indemnification liabilities if (i) it has not chosen or altered the transmitted works, performance and audio-visual products; and (ii) it provides such works, performance and audio-visual products to the designated user and prevents any person other than such designated user from obtaining the access.

Trademark Law

Registered trademarks are protected under the Trademark Law adopted in 1982 and amended in 1993, 2001 and 2013.  The PRC Trademark Office of SAIC is responsible for the registration and administration of trademarks throughout the PRC.  The Trademark Law has adopted a “first-to-file” principle with respect to trademark registration.  Where a trademark for which a registration has been made is identical or similar to another trademark that has already been registered or been subject to a preliminary examination and approval for use on the same kind of or similar commodities or services, the application for registration of such trademark may be rejected.  Any person applying for the registration of a trademark should not prejudice the existing right of others obtained by priority, nor should any person register in advance a trademark that has already been used by another person and has already gained “sufficient degree of reputation” through that person’s use.  After receiving an application, the PRC Trademark Office will make a public announcement if the relevant trademark passes the preliminary examination.  Within three months after such public announcement, any person may file an opposition against a trademark that has passed a preliminary examination.  The PRC Trademark Office’s decisions on rejection, opposition or cancellation of an application may be appealed to the PRC Trademark Review and Adjudication Board, whose decision may be further appealed through judicial proceedings.  If no opposition is filed within three months after the public announcement period or if the opposition has been overruled, the PRC Trademark Office will approve the registration and issue a registration certificate, upon which the trademark is registered and will be effective for a renewable ten-year period, unless otherwise revoked.

Regulation on Domain Name

The domain names are protected under the Administrative Measures on the Internet Domain Names promulgated by MII on November 5, 2004 and effective on December 20, 2004.  MIIT is the regulatory body responsible for the administration of the PRC Internet domain names, under supervision of which China Internet Network Information Center, or CNNIC, is responsible for the daily administration of CN domain names and Chinese domain names.  CNNIC promulgated the Implementation Rules of Registration of Domain Name , or the CNNIC Rules, which took effect on May 29, 2012.  Pursuant to the Administrative Measures on the Internet Domain Names and the CNNIC Rules, the registration of domain names adopts the “first to file” principle and the registrant shall complete the registration via the domain name registration service institutions.  In the event of a domain name dispute, the disputed parties may lodge a complaint to the designated domain name dispute resolution institution to trigger the domain name dispute resolution procedure in accordance with the CNNIC Measures on Resolution of the Domain Name Disputes, file a suit to the People’s Court or initiate an arbitration procedure.

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The Labor Law and the Labor Contract Law

Pursuant to the Labor Law of the PRC effective on January 1, 1995, the Labor Contract Law of the PRC promulgated by the Standing Committee of National People’s Congress on June 29, 2007 and becoming effective on January 1, 2008, as amended on December 28, 2012 and such amendment becoming effective on July 1, 2013, and the Implementing Regulations of the PRC Labor Contract Law promulgated by the State Council and becoming effective on September 18, 2008, an employment relationship is established from the date when an employee commences working for an employer and a written employment contract shall be entered into on this same day.  If an employment relationship has already been established with an employee but no written employment contract has been entered into simultaneously, a written employment contract shall be entered into within one month from the date on which the employee commences work.  If an employer fails to enter into a written employment contract with an employee after one month but within one year from the date on which the employment relationship is established, it shall pay the employee twice his/her salary for the period from the day following the lapse of one month as of the date of establishment of the employment relationship to the day prior to the execution of written employment contract, and rectify the situation by subsequently entering into a written employment contract with the employee.

Regulation on Foreign Exchange Control and Administration

Foreign exchange regulation in the PRC is primarily governed by the following regulations:

·Foreign Exchange Administration Rules, or the Exchange Rules, promulgated by the State Council on January 29, 1996, which was amended on January 14, 1997 and on August 5, 2008; and

·Administration Rules of the Settlement, Sale and Payment of Foreign Exchange, or the Administration Rules, promulgated by the People’s Bank of The PRC on June 20, 1996.

Under the Exchange Rules, for capital account items, such as direct investments, loans, security investments and the repatriation of investment returns, the conversion of foreign currency is still subject to the approval of, or registration with, SAFE or its competent local branches; while for the foreign currency payments for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, the SAFE approval is not necessary for the conversion of Renminbi except as otherwise explicitly provided by laws and regulations.  Under the Administration Rules, enterprises may only buy, sell or remit foreign currencies at banks that are authorized to conduct foreign exchange business after the enterprise provides valid commercial documents and relevant supporting documents and, in the case of certain capital account transactions, after obtaining approval from SAFE or its competent local branches.  Capital investments by enterprises outside of the PRC are also subject to limitations, which include approvals by the Ministry of Commerce, SAFE and the National Development and Reform Commission, or their respective competent local branches.  On July 21, 2005, the PRC government changed its policy of pegging the value of the Renminbi to the U.S. dollar.  Under the new policy, the Renminbi is permitted to fluctuate within a band against a basket of certain foreign currencies.

On August 29, 2008, SAFE issued the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or Circular No. 142.  Pursuant to Circular No. 142, the Renminbi capital from the settlement of foreign currency capital of a foreign-invested enterprise must be used within the business scope as approved by the applicable government authority, and unless otherwise stipulated by law or regulation, such Renminbi capital may not be used for domestic equity investment.  Documents certifying the purposes of the settlement of foreign currency capital into Renminbi, including a business contract, must also be submitted for the settlement of the foreign currency.  In addition, SAFE strengthened its oversight of the flow and use of the Renminbi capital converted from foreign currency registered capital of a foreign-invested company.  The use of such Renminbi capital may not be altered without the SAFE’s approval, and such Renminbi capital may not be used to repay Renminbi loans if such loans have not been used.  On March 30, 2015, SAFE issued SAFE Circular No. 19, which will become effective on June 1, 2015 and will replace SAFE Circular No. 142. Pursuant to SAFE Circular No. 19, up to 100% of the foreign currency capital of a foreign invested enterprise may be converted into RMB capital according to the actual business of the enterprise at its will and the RMB capital converted from the foreign currency registered capital of a foreign-invested enterprise may be used for equity investments within the PRC. However, under SAFE Circular No. 19, RMB capital converted from the foreign currency registered capital of a foreign-invested company still may not in any case be used to advance entrusted loans or repay inter-enterprise RMB loans.

Regulation on Foreign Exchange Registration of Offshore Investment by PRC Residents

On July 4, 2014, SAFE issued the Circular on Several Issues Concerning Foreign Exchange Administration of Domestic Residents Engaging in Overseas Investment, Financing and Round-Trip Investment via Special Purpose Vehicles, or SAFE Circular 37, which replaced the Circular on Several Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Financing and in Return Investments via Overseas Special Purpose Companies, or Circular No. 75, which went into effect on November 1, 2005.  SAFE Circular 37 and its detailed guidelines require PRC residents to register with the local branch of SAFE before contributing their legally owned onshore or offshore assets or equity interest into any special purpose vehicle, or SPV, directly established, or indirectly controlled, by them for the purpose of investment or financing and when there is (a) any change to the basic information of the SPV, such as any change relating to its individual PRC resident shareholders, name or operation period or (b) any material change, such as increase or decrease in the share capital held by its individual PRC resident shareholders, a share transfer or exchange of the shares in the SPV, or a merger or split of the SPV, the PRC resident must register such changes with the local branch of SAFE on a timely basis.  According to the relevant SAFE rules, failure to comply with the registration procedures set forth in SAFE Circular 37 may result in restrictions being imposed on the foreign exchange activities of the relevant onshore companies of SPVs, including the payment of dividends and other distributions to its offshore parent or affiliate and the capital inflow from such offshore entity, and may also subject the relevant PRC residents and onshore companies to penalties under PRC foreign exchange administration regulations.  Further, failure to comply with various SAFE registration requirements described above would result in liability for foreign exchange evasion under PRC laws.

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On February 13, 2015, SAFE issued the Circular on Further Simplifying and Improving the Foreign Exchange Policies on Direct Investment, or SAFE Circular No.13, pursuant to which qualified banks are delegated the power to register all PRC residents’ investment in SPVs pursuant to the SAFE Circular No.37, save for supplementary registration applications made by PRC residents who failed to comply with the SAFE Circular No.37, which shall still fall into the jurisdiction of the local SAFE branch.  The SAFE Circular No.13 will take effect on June 1, 2015.

We have requested PRC residents holding direct or indirect interest in our company to our knowledge to make the necessary applications, filings and amendments as required under SAFE Circular No.37 and other related rules.  Ms. Haiyan Gong, Mr. Yongqiang Qian and Mr. Xu Liu, Mr. Fuping Yu, Mr. Cheng Li and Mr. Qingjun Zhu have completed the amendment registration or registration in relation to our Reorganization and their ownership changes in accordance with SAFE Circular No. 75 and they are required to update the registration or amendment registration in relation to our initial public offering. We cannot assure you, however, that such amendment registration will be duly completed with the local SAFE branch.  See “Risk Factors—Risks Relating to Doing Business in China—PRC regulations relating to the establishment of offshore SPVs by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or may otherwise adversely affect us.”

Regulation on Stock Incentive Plan

On December 25, 2006, the People’s Bank of China promulgated the Administrative Measures for Individual Foreign Exchange.  On January 5, 2007, SAFE issued the Implementation Rules of the Administrative Measures for Individual Foreign Exchange, or the Individual Foreign Exchange Rule, which, among other things, specifies approval requirements for a PRC citizen’s participation in the employee stock ownership plans or stock option plans of an overseas publicly-listed company.  On February 15, 2012 , SAFE issued the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, or the Stock Incentive Plan Rules, which terminated the Processing Guidance on Foreign Exchange Administration of Domestic Individuals Participating in the Employee Stock Ownership Plans or Stock Option Plans of Overseas-Listed Companies issued by SAFE on March 28, 2007.  According to the Stock Incentive Plan Rules, if “domestic individuals” (both PRC residents and non-PRC residents who reside in the PRC for a continuous period of not less than one year, excluding the foreign diplomatic personnel and representatives of international organizations) participate in any stock incentive plan of an overseas listed company, a qualified PRC domestic agent, which could be the PRC subsidiaries of such overseas listed company, shall, among other things, file, on behalf of such individual, an application with SAFE to conduct the SAFE registration with respect to such stock incentive plan, and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with the stock purchase or stock option exercise.  Such PRC individuals’ foreign exchange income received from the sale of stocks and dividends distributed by the overseas listed company and any other income shall be fully remitted into a collective foreign currency account in the PRC opened and managed by the PRC domestic agent before distribution to such individuals.

Our employees and consultants, who are “domestic individuals” and have been granted share options, or PRC optionees, became subject to the Stock Incentive Plan Rules when our company became an overseas listed company upon the completion of our initial public offering.  However, we cannot assure you that each of the above optionees will fully comply with the Individual Foreign Exchange Rule and Stock Incentive Plan Rules.  See “Risk Factors—Risks Relating to Doing Business in China—Failure to comply with PRC regulations regarding the registration of share options held by our employees who are “domestic individuals” may subject such employee or us to fines and legal or administrative sanctions.”

Regulation on Overseas Listings

On August 8, 2006, six PRC regulatory agencies, namely, the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation, SAIC, CSRC and SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and were amended on June 22, 2009.  The M&A Rules purport, among other things, to require that offshore special purpose vehicles, or SPVs, that are controlled by PRC companies or individuals and that have been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange.  On September 21, 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings.

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While the application of the M&A Rules remains unclear, our PRC legal counsel has advised us that based on its understanding of the current PRC laws, rules and regulations and the M&A Rules, prior approval from the CSRC is not required under the M&A Rules for the listing and trading of our ADSs on Nasdaq Global Select Market given that (i) we established our PRC subsidiaries by means of direct investment other than by merger or acquisition of any equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rules, and (ii) no provisions in the M&A Rules clearly classify our contractual arrangements with our PRC operating companies as the acquisition subject to the M&A Rules.  See “Risk Factors—Risks Relating to Doing Business in China—The approval of the China Securities Regulatory Commission, or the CSRC, may be required in connection with our initial public offering under PRC regulations and, if required, we cannot assure you that we will be able to obtain such approval.  The regulation also establishes more complex procedures for acquisitions conducted by foreign investors that could make it more difficult for us to grow through acquisitions.”

C.            Organizational structure

We conduct substantially all of our business through two PRC subsidiaries and five VIEs in China.  The following diagram illustrates our subsidiaries, their country of incorporation and the proportion of our ownership of each as of the date of this annual report.

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(1)  Contracting shareholders of Shanghai Huaqianshu, Beijing Huaqianshu and Xique are Ms. Haiyan Gong, Mr. Yongqiang Qian, Mr. Xu Liu, Mr. Fuping Yu, Mr. Qingjun Zhu and Mr. Cheng Li. Contracting shareholders of Beijing Aizhenxin are Mr. Tao Lu, Mr. Hui Song and Mr. Yu Zhang.

(2)  Jiayuan Shanghai Center was established by Shanghai Huaqianshu as a privately funded non-enterprise institution that engages in non-profit social services.

Contractual Arrangements with Shanghai Huaqianshu, Beijing Huaqianshu, Beijing Aizhenxin, Xique and their Respective Shareholders and Jiayuan Shanghai Center

In order to comply with PRC law restricting foreign ownership and investment in value-added telecommunications service businesses and the prohibition on privately funded non-enterprise institutions from engaging in profit-making business operations in China, we operate our online dating businesses, online gaming businesses and offline personalized matchmaking services through a series of contractual arrangements among Beijing Miyuan, Shanghai Huaqianshu, Beijing Huaqianshu, Xique, Beijing Aizhenxin and their respective shareholders and Jiayuan Shanghai Center. Such contractual arrangements include exclusive technology licenses and service agreements, equity pledge agreements, exclusive purchase option agreements, shareholders’ voting rights entrustment agreements and loan agreements. As a result of these contractual arrangements,

·through Beijing Miyuan, we exercise effective control over Shanghai Huaqianshu, Beijing Huaqianshu, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center;

·in exchange for the provision of services through Beijing Miyuan, we receive substantially all of the earnings and other economic benefits of Shanghai Huaqianshu, Beijing Huaqianshu, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center to the extent permissible under PRC law; and

·through Beijing Miyuan, we have an exclusive option to purchase all or part of the equity interests in Shanghai Huaqianshu, Beijing Huaqianshu, Xique and Beijing Aizhenxin, in each case when and to the extent permitted by PRC law.

Agreements That Transfer Economic Benefit to Us

Exclusive Technology License and Service Agreement with Shanghai Huaqianshu.     Pursuant to the amended and restated exclusive technology license and service agreement entered into on March 1, 2014 between Beijing Miyuan and Shanghai Huaqianshu, Shanghai Huaqianshu retains Beijing Miyuan as its exclusive provider of software and hardware licenses, technology support, hardware and data maintenance and updates, software development, maintenance and professional training, information collection and research, technology consulting services related to the business operations of Shanghai Huaqianshu. As consideration for such services, Shanghai Huaqianshu agreed to pay service fees equal to a certain percentage of Shanghai Huaqianshu’s annual revenues as agreed by the parties from time to time. This amended and restated exclusive technology license and service agreement will expire on January 24, 2021, and, except by mutual agreement upon early termination by the parties in writing, the term of this agreement will be automatically extended for ten years.

Exclusive Technology License and Service Agreement with Jiayuan Shanghai Center.     Pursuant to the amended and restated exclusive technology license and service agreement entered into on March 1, 2014 between Beijing Miyuan and Jiayuan Shanghai Center, Jiayuan Shanghai Center retains Beijing Miyuan as its exclusive provider of software and hardware licenses, technology support, hardware and data maintenance and updates, software development, maintenance and professional training, information collection and research, technology consulting services related to the business operations of Jiayuan Shanghai Center. As consideration for such services, Jiayuan Shanghai Center agreed to pay service fees equal to a certain percentage of Jiayuan Shanghai Center’s annual revenues as agreed by the parties from time to time. This amended and restated exclusive technology license and service agreement will expire on January 24, 2021, and, except by mutual agreement upon early termination by the parties in writing, the term of this agreement will be automatically extended for ten years.

Exclusive Technology License and Service Agreement with Beijing Huaqianshu.     Pursuant to the amended and restated exclusive technology license and service agreement entered into on March 1, 2014 between Beijing Miyuan and Beijing Huaqianshu, Beijing Huaqianshu retains Beijing Miyuan as its exclusive provider of software and hardware licenses, technology support, hardware and data maintenance and updates, software development, maintenance and update, professional training, information collection and research, technology consulting services related to the business operations of Beijing Huaqianshu. As consideration for such services, Beijing Huaqianshu agreed to pay service fees equal to a certain percentage of Beijing Huaqianshu’s annual revenues as agreed by the parties from time to time. This amended and restated exclusive technology license and service agreement will expire on February 16, 2021 and, except by mutual agreement upon early termination by the parties in writing, the term of this agreement will be automatically extended for ten years.

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Exclusive Technology License and Service Agreement with Xique.     Pursuant to the amended and restated exclusive technology license and service agreement entered into on March 1, 2014 between Beijing Miyuan and Xique, Xique retains Beijing Miyuan as its exclusive provider of software and hardware licenses, technology support, hardware and data maintenance, software development, maintenance and update, professional training, information collection and research, technology consulting services related to the business operations of Xique. As consideration for such services, Xique agreed to pay service fees equal to a certain percentage of Xique’s annual revenues as agreed by the parties from time to time. This amended and restated exclusive technology license and service agreement will expire on February 16, 2021 and, except by mutual agreement upon early termination by the parties in writing, the term of this agreement will be automatically extended for ten years.

Exclusive Technology License and Service Agreement with Beijing Aizhenxin.      Pursuant to the exclusive technology license and service agreement entered into on August 13, 2012 between Beijing Miyuan and Beijing Aizhenxin, Beijing Aizhenxin retains Beijing Miyuan as its exclusive provider of software and hardware licenses, technology support, hardware and data maintenance and updates, software development, maintenance and professional training, information collection and research, technology consulting services related to the business operations of Beijing Aizhenxin. As consideration for such services, Beijing Aizhenxin agreed to pay service fees equal to a certain percentage of Beijing Aizhenxin’s annual revenues as agreed by the parties from time to time. This exclusive technology license and service agreement will expire on August 12, 2022, and, except by mutual agreement upon early termination by the parties in writing, the term of this agreement will be automatically extended for ten years.

Agreements That Provide Us Effective Control Over Shanghai Huaqianshu and Jiayuan Shanghai Center

Loan Agreement.     Pursuant to the amended and restated loan agreement entered into on March 1, 2014, between Beijing Miyuan and the shareholders of Shanghai Huaqianshu, Beijing Miyuan made interest-free loans of the equivalent of US$541,560, US$452,880, US$86,400, US$47,760, US$35,880 and US$35,520, respectively, to Mr. Yongqiang Qian, Ms. Haiyan Gong, Mr. Fuping Yu, Mr. Qingjun Zhu, Mr. Xu Liu and Mr. Cheng Li. Beijing Miyuan also made interest-free loans of RMB4,061,700, RMB3,396,600, RMB648,000, RMB358,200, RMB269,100 and RMB266,400, respectively, to Mr. Yongqiang Qian, Ms. Haiyan Gong, Mr. Fuping Yu, Mr. Qingjun Zhu, Mr. Xu Liu and Mr. Cheng Li. The loans are repayable on demand. If the shareholders of Shanghai Huaqianshu intend to voluntarily repay the loans in whole or in part, or if Beijing Miyuan requires the shareholders of Shanghai Huaqianshu to repay the loans in whole or in part, Beijing Miyuan or its designee may acquire a proportionate amount of the equity interests of Shanghai Huaqianshu from such shareholders for a purchase price equal to the principal amount of the repaid loans.

Shareholders’ Voting Rights Entrustment Agreement.     Pursuant to the amended and restated shareholders’ voting rights entrustment agreement entered into on March 1, 2014, between Beijing Miyuan, Shanghai Huaqianshu and its shareholders, the shareholders of Shanghai Huaqianshu shall grant a PRC citizen, as agreed by Beijing Miyuan, the right to exercise all their voting rights as shareholders of Shanghai Huaqianshu under its then-effective articles of association. Upon Beijing Miyuan’s request, the grantors shall revoke the proxy and grant the same proxy to another PRC citizen as designated by the designee of Beijing Miyuan. This amended and restated shareholders’ voting rights entrustment agreement will remain effective until January 24, 2021, and, except by mutual agreement upon early termination by the parties in writing or any termination arising from Shanghai Huaqianshu or its shareholders’ material breach of obligations thereunder, the term of this agreement will be automatically extended for ten years.

Exclusive Purchase Option Agreement.     Pursuant to the amended and restated exclusive purchase option agreement entered into on March 1, 2014 between Beijing Miyuan, Shanghai Huaqianshu and its shareholders, Beijing Miyuan has an exclusive option to purchase, or to designate another qualified individual or entity to purchase, to the extent permitted by PRC law, part or all of the equity interests in Shanghai Huaqianshu owned by Shanghai Huaqianshu’s shareholders. The purchase price for the entire equity interest of Shanghai Huaqianshu shall be the proportionate amount of the registered capital owned by such shareholder or an amount agreed by the parties in writing provided that, in case of any compulsory requirement by then PRC laws, the purchase price shall be the minimum price permitted by applicable PRC law. This amended and restated exclusive purchase option agreement remains in effect until the completion of the transfer of all the shares in accordance with this agreement.

Equity Pledge Agreement.     Pursuant to the amended and restated equity pledge agreement entered into on March 1, 2014 between Beijing Miyuan and Shanghai Huaqianshu’s shareholders, Shanghai Huaqianshu’s shareholders pledged their equity interest in Shanghai Huaqianshu to Beijing Miyuan to secure such shareholders’ obligations under the amended and restated loan agreement, the amended and restated shareholders’ voting rights entrustment agreement and the amended and restated exclusive purchase option agreement as well as Shanghai Huaqianshu’s obligations under the amended and restated exclusive technology license and service agreement, each as described above. This amended and restated equity pledge agreement will expire when the shareholders and Shanghai Huaqianshu have fully performed their obligations under the agreements described above.

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Cooperative Operation Agreement.     Pursuant to the amended and restated cooperative operation agreement entered into on March 1, 2014 among Beijing Miyuan, Shanghai Huaqianshu and Jiayuan Shanghai Center, in order to ensure Jiayuan Shanghai Center’s ability to make payments to Beijing Miyuan under the amended and restated exclusive technology license and service agreement between Jiayuan Shanghai Center and Beijing Miyuan, Shanghai Huaqianshu agrees to appoint designees of Beijing Miyuan as the members of the management committee and the key employees of Jiayuan Shanghai Center upon the request of Beijing Miyuan. This agreement will expire on January 24, 2021 and, unless terminated early by Beijing Miyuan, the term will be automatically extended for ten years.

Agreements That Provide Us Effective Control Over Beijing Huaqianshu

Loan Agreement.     Pursuant to the amended and restated loan agreement entered into on March 1, 2014, between Beijing Miyuan and the shareholders of Beijing Huaqianshu, Beijing Miyuan made interest-free loans of RMB451,300, RMB377,400, RMB72,000, RMB39,800, RMB29,900 and RMB29,600, respectively, to Mr. Yongqiang Qian, Ms. Haiyan Gong, Mr. Fuping Yu, Mr. Qingjun Zhu, Mr. Xu Liu and Mr. Cheng Li, the shareholders of Beijing Huaqianshu. The loans are repayable on demand. If the shareholders of Beijing Huaqianshu intend to voluntarily repay the loans, Beijing Miyuan or its designee may acquire the equity investments of Beijing Huaqianshu from the shareholders of Beijing Huaqianshu for a purchase price equal to the principal amount of the loans.

Shareholders’ Voting Rights Entrustment Agreement.     Pursuant to the amended and restated shareholders’ voting rights entrustment agreement entered into on March 1, 2014, between Beijing Miyuan, Beijing Huaqianshu and its shareholders, the shareholders of Beijing Huaqianshu have granted Ms. Haiyan Gong, who is a PRC citizen, as agreed by Beijing Miyuan, the right to exercise all their voting rights as shareholders of Beijing Huaqianshu as provided under its articles of association. Upon Beijing Miyuan’s request, the grantors shall revoke the proxy and grant the same proxy to another PRC citizen as designated by Beijing Miyuan. This amended and restated shareholders’ voting rights entrustment agreement will remain effective until February 16, 2021 and, except by mutual agreement upon early termination by the parties in writing or any termination arising from Beijing Huaqianshu or its shareholders’ material breach of obligations thereunder, the term of this amended and restated shareholders’ voting rights entrustment agreement will be automatically extended for ten years.

Exclusive Purchase Option Agreement.     Pursuant to the amended and restated exclusive purchase option agreement entered into on March 1, 2014, between Beijing Miyuan, Beijing Huaqianshu and its shareholders, Beijing Miyuan has an exclusive option to purchase, or to designate another qualified individual or entity to purchase, to the extent permitted by PRC law, part or all of the equity interests in Beijing Huaqianshu owned by Beijing Huaqianshu’s shareholders. The purchase price for the entire equity interest of Beijing Huaqianshu shall be the amount of the proportionate registered capital owned by such shareholder or an amount agreed by the parties in writing, provided that, in case of any compulsory requirement by then PRC laws, the purchase price shall be the minimum price permitted by applicable PRC law. This amended and restated exclusive equity transfer option agreement remains in effect until the completion of the transfer of all the shares in accordance with this agreement.

Equity Pledge Agreement.     Pursuant to the amended and restated equity pledge agreement entered into on March 1, 2014, between Beijing Miyuan and Beijing Huaqianshu’s shareholders, Beijing Huaqianshu’s shareholders pledged their equity interest in Beijing Huaqianshu to Beijing Miyuan to secure such shareholders’ obligations under the amended and restated loan agreement, the amended and restated shareholders’ voting rights entrustment agreement and the amended and restated exclusive purchase option agreement and Beijing Huaqianshu’s obligations under the amended and restated exclusive technology license and service agreement, each as described above. This amended and restated equity pledge agreement will expire when the shareholders and Beijing Huaqianshu have fully performed their obligations under the agreements described above.

Agreements That Provide Us Effective Control Over Xique

Loan Agreement.     Pursuant to the amended and restated loan agreement entered into on March 1, 2014, between Beijing Miyuan and the shareholders of Xique, Beijing Miyuan made interest-free loans of RMB451,300, RMB377,400, RMB72,000, RMB39,800, RMB29,900 and RMB29,600, respectively, to Mr. Yongqiang Qian, Ms. Haiyan Gong, Mr. Fuping Yu, Mr. Qingjun Zhu, Mr. Xu Liu and Mr. Cheng Li, the shareholders of Xique. The loans are repayable on demand. If the shareholders of Xique intend to voluntarily repay the loans, Beijing Miyuan or its designee may acquire the equity investments of Xique from the shareholders of Xique for a purchase price equal to the principal amount of the loans.

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Shareholders’ Voting Rights Entrustment Agreement.     Pursuant to the amended and restated shareholders’ voting rights entrustment agreement entered into on March 1, 2014, between Beijing Miyuan, Xique and its shareholders, the shareholders of Xique have granted Ms. Haiyan Gong, who is a PRC citizen, as agreed by Beijing Miyuan, the right to exercise all their voting rights as shareholders of Xique as provided under its articles of association. Upon Beijing Miyuan’s request, the grantors shall revoke the proxy and grant the same proxy to another PRC citizen as designated by Beijing Miyuan. This amended and restated shareholders’ voting rights entrustment agreement will remain effective until February 16, 2021 and, except by mutual agreement upon early termination by the parties in writing or any termination arising from Xique or its shareholders’ material breach of obligations thereunder, the term of this amended and restated shareholders’ voting rights entrustment agreement will be automatically extended for ten years.

Exclusive Purchase Option Agreement.     Pursuant to the amended and restated exclusive purchase option agreement entered into on March 1, 2014, between Beijing Miyuan, Xique and its shareholders, Beijing Miyuan has an exclusive option to purchase, or to designate another qualified individual or entity to purchase, to the extent permitted by PRC law, part or all of the equity interests in Xique owned by Xique’s shareholders. The purchase price for the entire equity interest of Xique shall be the amount of the proportionate registered capital owned by such shareholder or an amount agreed by the parties in writing, provided that, in case of any compulsory requirement by then PRC laws, the purchase price shall be the minimum price permitted by applicable PRC law. This amended and restated exclusive equity transfer option agreement remains in effect until the completion of the transfer of all the shares in accordance with this amended and restated exclusive purchase option agreement.

Equity Pledge Agreement.     Pursuant to the amended and restated equity pledge agreement entered into on March 1, 2014, between Beijing Miyuan and Xique’s shareholders, Xique’s shareholders pledged their equity interest in Xique to Beijing Miyuan to secure such shareholders’ obligations under the amended and restated loan agreement, the amended and restated shareholders’ voting rights entrustment agreement and the amended and restated exclusive purchase option agreement and Xique’s obligations under the amended and restated exclusive technology license and service agreement, each as described above. This amended and restated equity pledge agreement will expire when the shareholders and Xique have fully performed their obligations under the agreements described above.

Agreements That Provide Us Effective Control Over Beijing Aizhenxin

Loan Agreement.     Pursuant to a loan agreement entered into on August 13, 2012, between Beijing Miyuan and Mr. Tao Lu, Mr. Hui Song and Mr. Yu Zhang, Beijing Miyuan made interest-free loans of the equivalent of RMB6.0 million, RMB6.0 million and RMB8.0 million, respectively, to Mr. Tao Lu, Mr. Hui Song and Mr. Yu Zhang. The loans are repayable on demand. If Mr. Tao Lu, Mr. Hui Song and Mr. Yu Zhang intend to voluntarily repay the loans in whole or in part, or if Beijing Miyuan requires Mr. Tao Lu, Mr. Hui Song and Mr. Yu Zhang to repay the loans in whole or in part, Beijing Miyuan or its designee may acquire a proportionate amount of the equity interests of Beijing Aizhenxin from Mr. Tao Lu, Mr. Hui Song and Mr. Yu Zhang for a purchase price equal to the principal amount of the repaid loans.

Shareholders’ Voting Rights Entrustment Agreement.     Pursuant to the shareholders’ voting rights entrustment agreement entered into on August 13, 2012, between Beijing Miyuan, Beijing Aizhenxin and its shareholders, the shareholders of Beijing Aizhenxin have granted Ms. Haiyan Gong, who is a PRC citizen, as agreed by Beijing Miyuan, the right to exercise all their voting rights as shareholders of Beijing Aizhenxin as provided under its articles of association. Upon Beijing Miyuan’s request, the grantors shall revoke the proxy and grant the same proxy to another PRC citizen as designated by Beijing Miyuan. The shareholders’ voting rights entrustment agreement will remain effective until August 12, 2022 and, except by mutual agreement upon early termination by the parties in writing or any termination arising from Beijing Aizhenxin or its shareholders’ material breach of obligations thereunder, the term of the shareholders’ voting rights entrustment agreement will be automatically extended for ten years.

Exclusive Purchase Option Agreement.     Pursuant to the exclusive purchase option agreement entered into on August 13, 2012, between Beijing Miyuan, Beijing Aizhenxin and its shareholders, Beijing Miyuan has an exclusive option to purchase, or to designate another qualified individual or entity to purchase, to the extent permitted by PRC law, part or all of the equity interests in Beijing Aizhenxin owned by Beijing Aizhenxin’s shareholders. The purchase price for the entire equity interest of Beijing Aizhenxin shall be the amount of the proportionate registered capital owned by such shareholder or an amount agreed by the parties in writing, provided that, in case of any compulsory requirement by then PRC laws, the purchase price shall be the minimum price permitted by applicable PRC law. The exclusive purchase option agreement remains in effect until the completion of the transfer of all the shares in accordance with the exclusive purchase option agreement.

Equity Pledge Agreement.     Pursuant to the equity pledge agreement entered into on August 13, 2012, between Beijing Miyuan and Beijing Aizhenxin’s shareholders, Beijing Aizhenxin’s shareholders pledged their equity interest in Beijing Aizhenxin to Beijing Miyuan to secure such shareholders’ obligations under the loan agreement, the shareholders’ voting rights entrustment agreement and exclusive purchase option agreement and Beijing Aizhenxin’s obligations under the exclusive technology license and service agreement, each as described above. The equity pledge agreement will expire when the shareholders and Beijing Aizhenxin have fully performed their obligations under the agreements described above.

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In the opinion of Zhong Lun Law Firm, our PRC legal counsel:

·the corporate structure of Beijing Miyuan, our PRC operating companies and Jiayuan Shanghai Center complies with current PRC laws, rules and regulations; and

·our contractual arrangements among Beijing Miyuan, our PRC operating companies and their respective shareholders, and Jiayuan Shanghai Center are valid and binding on all parties to these arrangements, and do not violate current PRC laws, rules or regulations.

Our PRC legal counsel has further advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. There can be no assurance that the PRC regulatory authorities will not take a view that is contrary to the above opinion of our PRC legal counsel in the future and if the PRC government determines that the agreements that establish the structure for operating our PRC online dating businesses, online game businesses and offline personalized matchmaking services do not comply with applicable restrictions on foreign investment in the telecommunications industry, the prohibition on foreign investment in the online game industry, the prohibition on privately funded non-enterprise institutions from engaging in profit-making business operations, we could be subject to severe penalties including being prohibited from continuing operation. See “Item 3.  Key Information.  D. Risk Factors—Risks Relating to Regulation of Our Business and to Our Structure.”

D.Property, plant and equipment

Our principal executive offices are currently located on premises comprising approximately 3,266 square meters at Anhua Development Building, No. 35 Anding Road, Chaoyang District, Beijing, the People’s Republic of China. We also have offices in Shanghai, Guangzhou, Chengdu, Wuhan, Shenzhen and Langfang.  We lease all of our leased premises from unrelated third parties.  We believe after due inquiry that each of the lessors either has valid title to the property or has proper authorization from the title owner to sublease the property.  We plan to renew each of these leases when they expire. Below is a summary of the term of each of our leases

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Property	Space (in square meters)	Expiration Date
Beijing	220	May 4, 2016
	293	January 16, 2017
	610	August 18, 2016
Shanghai	694	November 14, 2015
	389	December 5, 2016
Guangzhou	233	March 31, 2016
	296	November 14, 2015
	114	June 30, 2016
Chengdu	308	December 14, 2017
Wuhan	173	December 5, 2015
Shenzhen	566	August 14, 2016
Langfang	136	November 4, 2015
	257	June 19, 2015

We believe that our facilities are adequate to meet our needs for the foreseeable future, and that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansions.

Item 4A.Unresolved Staff Comments.

Not applicable.

Item 5.Operating and Financial Review and Prospects.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information — D. Risk Factors” or in other parts of this annual report on Form 20-F.

A.Operating results

Overview

We operate Jiayuan.com, the largest online dating platform in China.  According to iResearch, Jiayuan.com ranked first in terms of number of unique visitors and time spent among all online dating websites in China in 2014.

We derive most of our revenues from our Jiayuan.com platform.  Our Jiayuan.com platform can be accessed through Internet browsers, wireless applications, desktop clients and WAP mobile browsers. We offer users of our Jiayuan.com platform free registration with immediate full search access to our database, and we began charging fees for messaging services provided on our Jiayuan.com platform in October 2008.  Our online revenues are mainly derived from unlock communications fees, periodic subscription fees and revenues from a number of fee-based value-added services from our Jiayuan.com platform.  We charge either the sender or the recipient of our Jiayuan.com platform in order to unlock communications, a pricing strategy designed to target and reach the mass market with its affordability.  We intend to generate additional revenue from our online businesses by increasing the number of our paying users and by encouraging our users to purchase additional services.  We intend to achieve this by broadening the scope of our advertising campaign in online and offline channels and enhancing user experience by optimizing our search methodologies.  We also plan to develop new services for our users, such as continued expansion into our mobile platform, adding additional types of subscription packages and increasing the ways in which users can interact with one another.  In addition, in October 2012, we announced the launch of our new website, izhenxin.com, a new dating website designed to satisfy the needs of China’s marriage-minded singles. In September 2013, we launched open beta testing of qiuai.com, a mobile dating platform tailored to feature phone users, followed by limited beta testing of Qiuyuehui in October 2013, which is an e-commerce app allowing users to send real gifts or pre-paid dinner invitations to initiate communications. As our paying user base grows, we intend to generate additional revenues through our value-added services such as virtual gifts and improved search rankings as well as new value-added services.  We had an average of 5,668,840 monthly active user accounts in 2014.  The number of our average monthly paying user accounts in 2014 was 1,510,919 compared to 1,339,258 in 2013, representing an increase of 12.8%.

We have continued to expand our business to personalized matchmaking services, which we previously referred to as our VIP services and which offer personalized search and matchmaking services for busy professionals who prefer more personalized services. Our personalized matchmaking services help to diversify our revenue mix. By the end of 2014, we performed personalized matchmaking services in 78 locations across 59 cities in China, compared to 30 locations in 25 cities at the end of 2013. Due to the rapid expansion of our personalized matchmaking services, we restructured our reportable segments as online services, personalized matchmaking services and events and other services in 2013. Prior to 2013, our reportable segments were online services, events and personalized matchmaking services and other services.

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Events and others is the third component of our business. In 2014 we hosted a total of 653 offline events in 79 cities throughout China to provide our users offline opportunities to meet in person.  Such offline events also help to promote our national brand name and benefit our online platform.

We generated net revenues of RMB410.8 million, RMB492.6 million and RMB614.0 million (US$99.0 million) in 2012, 2013 and 2014, respectively.  We had net income of RMB58.9 million, RMB63.7 million and RMB20.1 million (US$3.2 million) in 2012, 2013 and 2014, respectively.  Excluding non-cash share-based compensation expenses, we had non-GAAP net income of RMB72.3 million, RMB74.1 million and RMB29.7 million (US$4.8 million) in 2012, 2013 and 2014, respectively.  For a reconciliation of our non-GAAP net (loss)/income to our U.S. GAAP net (loss)/income, see “Item 3. Key Information—A. Selected Financial Data.”

Factors Affecting Our Results of Operations

Continued popularity of online dating services.  Our business is highly dependent upon online dating remaining a popular means of seeking committed relationships in China.  We have benefited from the growth in the demand for online dating services in recent years as an increasingly accepted means for single adults to meet new companions, form relationships and get married.  Unprecedented urbanization, rapidly changing demographics, China’s unique cultural considerations and traditional values and China’s fast growing Internet industry have all contributed to the demand for online dating services in China.

Our results of operations are significantly affected by the number of our paying users and the long-term growth of our business will be driven by the appeal of our online services relative to traditional matchmaking services or forms of dating and related services that might emerge in the future.  Should the popularity of online dating services decline, such as due to negative publicity, our results of operations may be adversely affected.

Our ability to attract and engage paying users.  Our revenues in any given period are significantly affected by the number of users who pay for our online dating services.  Rising income levels and overall economic growth in China in recent years have led to an increasing willingness of users to pay for our services.  Net revenues from our online services increased by 16.4% from RMB362.5 million in 2012 to RMB422.1 million in 2013 and by 0.8% from RMB422.1 million in 2013 to RMB425.5 million (US$68.6 million) in 2014.  This corresponded to a 9.3% increase in average monthly paying user accounts from 1,224,890 in 2012 to 1,339,258 in 2013 and a 12.8% increase in average monthly paying user accounts from 1,339,258 in 2013 to 1,510,919 in 2014.  The average percentage of monthly active user accounts that were paying user accounts in 2014 was approximately 26.7%, compared to 25.7% over the corresponding period in the prior year.  The long-term growth of our business is largely driven by our ability to attract new users and to convert these users into paying users.  We believe we attract users because of our reputation for providing a serious and reliable online dating platform, our large active user base, the high-quality user experience and the general market awareness of our “Jiayuan” brand.  Our users become and remain paying users because of the value and variety of our services as well as our results-based fee structure, which we believe align revenue generation with results experienced by our users.  The growth in revenues to date has been driven primarily by the increasing number of our paying users and by the increase in ARPU and our revenues for future periods will depend on our continued success in attracting and retaining paying users, as well as increasing monetization of the paying users.

However, our ability to attract and engage paying users is also subject to challenges, such as increasing competition in the online dating business in China.  We compete with other online dating service providers, social networking websites and traditional dating services.  If we fail to compete successfully, our results of operations may be adversely affected.

Our ability to introduce new products and services.  Prior to October 2008, we generated revenues primarily from non-message related value-added services and selling advertisement space on our platform.  In an effort to generate additional revenue from our user base, we began charging fees for messaging between users via our Jiayuan.com online dating platform in October 2008, which contributed to our rapid revenue growth.  As a result, 78.0% of net revenue from our online services was generated from our unlock communications fees and periodic message-related subscription fees in 2014.  We also introduced other value-added services, such as virtual gifts, improved search rankings and online chatting services as well as premium user subscriptions such as “VIP memberships” to attract and retain users.  We intend to introduce more value-added services in the future.  In addition, we began cooperating with matchmaking service agencies in providing personalized matchmaking services in China starting from 2013. We allow matchmaking service agencies limited rights to use our brand, trademark and certain resources under our direction in accordance with the matchmaking services agreements.  We expect to expand such matchmaking services in the future. Although we expect net revenue generated from our value-added services and matchmaking services to increase going forward, our results of operations will be affected by the level of user acceptance and popularity of such new products and services.

Our ability to control our operating costs and expenses and improve operational efficiency.  Our profitability is significantly affected by our cost of revenues and operating expenses.  Our cost of revenues from online services, which is related to the number of our active user accounts as well as the manner by which paying user accounts pay for our services, increased 19.6% from RMB117.8  million in 2012 to RMB141.0 million in 2013 and 5.6% from RMB141.0 million in 2013 to RMB148.8 million (US$24.0 million) in 2014 primarily due to the increase in the percentage of user payments that are made through telecommunication operators and the higher commissions charged by our WVAS partners compared to commissions charged by online banking and online payment providers.  The main factors affecting our selling and marketing expenses are our advertising and promotional expenses to attract new users to our platform and services and our personnel costs.  Our selling and marketing expenses have increased significantly from RMB143.4 million in 2012 to RMB183.6 million in 2013 to RMB252.7 million (US$40.7 million) in 2014 as we expanded our marketing and brand promotion efforts, as well as due to the increase in advertising fees charged by our third-party service providers, such as commercial search engines and Internet portals. We expect our selling and marketing expenses to increase in the future as we seek to maintain and expand our user base and as advertising fees charged by third-party service providers continue to increase.  Therefore, our ability to control such costs and expenses will directly impact our profitability.

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Description of Certain Statement of Comprehensive Income Items

Net Revenues

We derive our revenues from three segments, online services, personalized matchmaking services and events and other services.  Our net revenues are gross revenues net of the PRC business taxes and surcharges, ranging from 0% to 8.6%, that our PRC operating companies pay on their gross revenues.

The following table sets forth our net revenues by segment for the periods indicated:

	For the year ended December 31,
	2012	2013	2014	2014
	RMB	RMB	RMB	US$
	(in thousands)
Online Services	362,492	422,088	425,544	68,585
Personalized Matchmaking Services	33,143	52,458	164,598	26,528
Events and Other Services	15,168	18,060	23,848	3,844
Total	410,803	492,606	613,990	98,957

Online Services

Net revenues from online services primarily reflect net revenue generated from our online dating services.  Net revenues generated from online dating services primarily consist of unlock communications fees and periodic subscription fees, as well as fees from value-added services such as virtual gifts, improved search rankings and online chatting services. In 2014, 78.0% of net revenues from our online services were generated from our unlock communications fees and periodic message-related subscription fees.  Net revenue from online services accounted for 88.2%, 85.7% and 69.3% of our net revenues in 2012, 2013 and 2014, respectively.

Personalized Matchmaking Services

Net revenues from personalized matchmaking services, which we previously referred to as our VIP services, accounted for 8.1%, 10.6% and 26.8% of our net revenues in 2012, 2013 and 2014, respectively.  Net revenues from personalized matchmaking services primarily reflect net revenues from providing special, personalized services where our service representatives take a proactive approach in finding potential companions for our personalized matchmaking customers.  Payments for personalized matchmaking services are typically collected upon execution of the personalized matchmaking service agreement.  In 2013, we began cooperating with matchmaking service agencies in providing personalized matchmaking services in China. We grant matchmaking service agencies limited rights to use our brand, trademark and certain resources under our direction in accordance with the matchmaking service agreements. We collect upfront payments from clients of the matchmaking services and remit the commission fees to the matchmaking service agencies at the contractual pre-determined rates. We are responsible for the determination of the service scope and price, the signing of the service agreements and the collection of service fees from customers directly. Revenue generated from clients who receive matchmaking services through such matchmaking service agencies are recognized on a gross basis as we are the primary obligor in the service arrangements.

Events and Other Services

Net revenues from events are generated from organizing and hosting events, including speed-dating, dance parties and other social events for our users and consist primarily of ticket sales.  Net revenues from events also include sponsorship fees whereby we enter into sponsorship arrangements with third-party companies to sponsor events hosted by us.  In 2014, we hosted a total of 653 offline events in 79 cities throughout China to provide our users offline opportunities to meet in person.  We expect our events services to continue to attract a large attendance due to our established brand and reputation in the online dating sector. At the end of 2014, we began to operate a membership dating club in Beijing where members can participate in offline dating activities at the club. Under this type of service, users pay a single-entry fee or periodic subscription fees. Fees for these services are collected upfront.

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Other services revenue consists primarily of advertising.  Advertising revenues are principally derived from online advertising arrangements, which allow advertisers to place advertisements on particular areas of our websites, in particular formats and over particular periods of time. Historically, advertisements were placed on our Jiayuan.com website and now represent less than 1% of our net revenues in each of 2012, 2013 and 2014, respectively.

Net revenue from events and other services accounted for 3.7%, 3.7% and 3.9% of our net revenues in 2012, 2013 and 2014, respectively.

Cost of Revenues

Our cost of revenues includes the cost of services in our three segments.  Personnel costs include share-based compensation expenses.  The following table sets forth the components of our cost of revenues for the periods indicated:

	For the year ended December 31,
	2012	2013	2014	2014
	RMB	RMB	RMB	US$
	(in thousands)
Online Services	117,830	140,975	148,811	23,984
Personalized Matchmaking Services	15,903	29,792	117,054	18,866
Events and Other Services	9,952	9,754	11,924	1,922
Total	143,685	180,521	277,789	44,772

Online Services

Cost of services in our online services segment primarily consists of commission expenses, personnel costs, network costs and depreciation.  Commission expenses primarily consist of the payment made to WVAS partners for money collection.  Personnel costs include salary and benefits paid to our staff and customer service personnel.   Network costs consist of server hosting fees, bandwidth fees and related fees paid to vendors that host our server network.  We anticipate that our cost of online services will continue to increase.

Personalized Matchmaking Services

Cost of services in our personalized matchmaking services segment primarily include personnel costs and commission expenses paid to personalized matchmaking agencies.  Commission expenses represent payments we remit to matchmaking service agencies at the contractual pre-determined rates. Cost of revenues from personalized matchmaking services accounted for 11.1%, 16.5% and 42.1% of our cost of revenues in 2012, 2013 and 2014, respectively.

Events and Other Services

Cost of services in our events and other services segment primarily includes personnel costs, including salaries as well as commissions paid to our staff in respect of events and advertising revenue, and event expenses.  Cost of revenues from events and other services accounted for 6.9%, 5.4% and 4.3% of our cost of revenues in 2012, 2013 and 2014, respectively.

Operating Expenses

Our operating expenses consist of selling and marketing expenses, general and administrative expenses and research and development expenses.  The following table sets forth our operating expenses by amount for the periods indicated:

	For the year ended December 31,
	2012	2013	2014	2014
	RMB	RMB	RMB	US$
	(in thousands)
Selling and Marketing Expenses	143,376	183,619	252,736	40,734
General and Administrative Expenses	54,367	52,565	58,071	9,359
Research and Development Expenses	17,587	21,918	23,149	3,731
Total	215,330	258,102	333,956	53,824

Selling and Marketing Expenses

Our selling and marketing expenses primarily consist of advertising and promotion expenses for our online and events services, expenses in relation to our collaboration with television shows, salary and benefits for our sales and marketing personnel, share-based compensation expenses and other expenses incurred by our sales and marketing personnel.  We incur substantial expenses related to our advertising.  These advertising costs are primarily online advertising, including fees we pay to third-party service providers, such as commercial search engines and Internet portals, for the purpose of promoting and increasing traffic to our website and wireless platform, which helps us to raise our brand profile.  We expect our selling and marketing expenses to increase in the future as we continue to promote our platforms and our brands and as advertising rates in China continue to increase.

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General and Administrative Expenses

Our general and administrative expenses primarily consist of salary and benefits for general management, finance, administrative personnel, professional service fees such as audit fees and legal fees, share-based compensation expenses, office expenses and other expenses in relation to general and administrative purposes.

Research and Development Expenses

Our research and development expenses consist primarily of salaries and benefits for personnel engaged in the research and development of our online and mobile platforms.  We intend to continue investing in our research and development capabilities.

Share-based Compensation Expenses

Share options

We have granted certain options to purchase our ordinary shares to our directors, officers, employees and non-employees.  As of December 31, 2012, 2013 and 2014, options to purchase 4,368,382 ordinary shares, 3,134,475 ordinary shares and 2,776,455 ordinary shares, respectively, were outstanding, including options to purchase 1,353,698 ordinary shares, 1,357,529 ordinary shares and 1,373,002 ordinary shares, respectively, that were legally vested.

In 2012, 2013 and 2014, we recognized share-based compensation expenses totaling RMB11.0 million, RMB8.3 million and RMB5.5 million (US$0.9 million), respectively.  Our share-based compensation expenses decreased in 2014 from 2013 primarily due to the accelerated basis of attribution over the requisite service period and in 2013 from 2012 primarily due to the same reason.  These costs are included in cost of revenues, selling and marketing expenses, general and administrative expenses and research and development expenses, and are associated with the expensing of vested options.

As of December 31, 2014, we had RMB3.7 million (US$0.6 million) in unrecognized share-based compensation expenses related to non-vested share options and unrecognized compensation cost of employee options with service vesting conditions were expected to be recognized over a weighted average period of 0.89 years.  We plan to continue to issue options and other share-based compensation as part of our recruitment and retention policies, which may lead to significant share-based compensation expenses in the future.  For more information, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Policies—Share-based Compensation.”

Restricted shares

In March 2012, December 2012, September 2013 and July 2014, we granted 232,500, 49,040, 34,286 and 486,000 restricted shares, respectively, to certain of our key employees and directors. These restricted shares will vest over a four-year service period, with 25% of the restricted shares subject to vesting on the first anniversary of the date of grant and the remaining 75% subject to vesting in twelve quarterly installments.

For the year ended December 31, 2012, 2013 and 2014, we recorded share-based compensation of RMB2.4 million, RMB2.1 million and RMB4.1 million (US$0.7 million) related to the restricted shares using the graded-vesting method.

As of December 31, 2014, unrecognized compensation expenses relating to the non-vested restricted shares amounted to RMB7.4 million (US$1.2 million). These expenses are expected to be recognized over a weighted average period of 1.03 years.

The following table sets forth a breakdown of our share-based compensation expenses recognized for the periods indicated.

	For the year ended December 31,
	2012	2013	2014	2014
	RMB	RMB	RMB	US$
	(in thousands)
Cost of Revenues	3,380	1,737	1,964	317
Selling and Marketing Expenses	807	371	572	92
General and Administrative Expenses	7,355	7,627	6,308	1,017
Research and Development Expenses	1,821	693	760	122
Total	13,363	10,428	9,604	1,548

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Taxation

Cayman Islands

We are not subject to Cayman Islands tax on our income or capital gains.  Payment of dividends is not subject to withholding tax in the Cayman Islands.

British Virgin Islands

Harper Capital Inc. is not subject to British Virgin Islands tax on income or capital gains.  Payment of dividends is not subject to withholding tax in the British Virgin Islands.

Hong Kong

Jiayuan Hong Kong, our wholly-owned subsidiary, is not subject to Hong Kong profits tax on foreign-sourced dividends and capital gains.  As an entity incorporated in Hong Kong, Jiayuan Hong Kong was subject to 16.5% income tax for the year ended December 31, 2014 on its taxable income generated from operations in Hong Kong.  Payment of dividends is not subject to withholding tax in Hong Kong.

PRC

Enterprise Income Tax

Our subsidiaries and affiliates in China are subject to Enterprise Income Tax, or EIT, in China.  Prior to January 1, 2008, under applicable PRC tax laws, our subsidiaries and affiliated entities were generally subject to EIT at a statutory rate of 33%, which comprised 30% national income tax and 3% local income tax.  However, certain types of foreign-invested enterprises and high or new technology enterprises located in certain specified high-tech zones were entitled to preferential tax treatments.

On March 16, 2007, the National People’s Congress adopted the Enterprise Income Tax Law, or the EIT Law, and in December 2007, the State Council promulgated the implementing rules of the EIT Law, both of which became effective from January 1, 2008.  The EIT Law significantly curtails tax incentives granted to foreign-invested enterprises under the previous tax law.  The EIT Law, however, (i) reduces the statutory rate of enterprise income tax from 33% to 25%, (ii) permits companies to continue to enjoy their existing tax incentives, subject to certain transitional phase-out rules, and (iii) introduces new tax incentives, subject to various qualification criteria.  Under the phase-out rules, enterprises established before the promulgation date of the EIT Law and which were granted preferential EIT treatment under the then effective tax laws or regulations may continue to enjoy their preferential tax treatments until their expiration.  In addition, the EIT Law and its implementing rules permit qualified high and new technology enterprises, or HNTEs, to enjoy a reduced EIT rate of 15%.  The qualification criteria are significantly higher than those prescribed by the old tax rules.  See “Item 3.  Key Information.  D. Risk Factors—Risk Factors Relating to Doing Business in China—Our business benefits from certain government tax preferential treatment and incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our tax burden and reduce our net income.”

According to a circular issued by the Ministry of Finance of the PRC and the State Administration of Taxation of the PRC on February 22, 2008, “software enterprises” are entitled to an exemption from income taxes for two years beginning with their first profitable year and a 50% tax reduction to a 12.5% income tax rate for the subsequent three years, provided the “software enterprise” annual inspection has been passed in each of these years.

Our subsidiaries and affiliated entities in China were subject to the statutory EIT rate of 33% on taxable income prior to January 1, 2008 and the standard EIT rate of 25% thereafter, except that (i) Shanghai Huaqianshu has been deemed to qualify as an HNTE under the EIT Law in 2010 and was entitled to the reduced EIT rate of 15% for 2010, 2011 and 2012, and has also been deemed to qualify as an HNTE under the EIT Law in 2013 and entitled to the reduced EIT rate of 15% for 2013, 2014 and 2015; (ii) Shanghai Huaqianshu qualified as a “key software enterprise” in 2013 and was entitled to the reduced EIT rate of 10% for 2013 and 2014; and (iii) Beijing Miyuan has qualified as a “software enterprise,” allowing it to be exempt from income taxes for two years beginning with its first profitable year and a 50% tax reduction to the 12.5% corporate income tax rate for the subsequent three years, if it passes the “software enterprise” annual inspection in each of these years. Shanghai Miyuan had qualified as a “software enterprise,” allowing it to be exempt from income taxes for 2011 and 2012 and a preferential tax rate of 12.5% for 2013, 2014 and 2015, if it passes the “software enterprise” annual inspection in each of these years. However, as Shanghai Miyuan did not continually qualify as a software enterprise in 2014, it was subject to the standard EIT rate of 25% in 2014 and thereafter.

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Withholding Tax

As a holding company, substantially all of our income may be derived from dividends we receive from Shanghai Miyuan and Beijing Miyuan through our Hong Kong subsidiary.  The EIT Law and its implementing rules provide that dividends paid by a PRC entity to a non-resident enterprise for EIT purposes is subject to PRC withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with the PRC.  In addition, under the Arrangement between the Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion, income tax on dividends payable to a company resident in Hong Kong that holds more than a 25% equity interest in a PRC resident enterprise may be reduced to a rate of 5%.  See “Item 3.  Key Information.  D. Risk Factors—Risks Relating to Doing Business in China—Dividends we receive from our PRC subsidiaries may be subject to PRC withholding tax and we cannot assure you that we will be able to enjoy the preferential withholding tax treatment.”

Business Tax and Surcharges

Our PRC operating companies are subject to business tax and surcharges at the rate ranging from 0% to 8.6% of their revenues.  We recognized RMB14.2 million, RMB17.1 million and RMB16.3 million (US$2.6 million) of business tax and surcharges as a reduction of revenues in 2012, 2013 and 2014, respectively.

Transition from PRC Business Tax to PRC Value Added Tax

Effective January 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation launched a Business Tax to Value Added Tax, or VAT, Transformation Pilot Program, or the Pilot Program, for certain industries in Shanghai. Beginning on September 1, 2012, the Pilot Program was expanded from Shanghai to eight other cities and provinces in China, including Beijing. VAT payable on goods sold or taxable labor services provided by a general VAT taxpayer for a taxable period is the net balance of the output VAT for the period after crediting the input VAT for the period. Hence, the amount of VAT payable does not result directly from output VAT generated from goods sold or taxable labor services provided.

With the adoption of the Pilot Program, Shanghai Miyuan, Beijing Miyuan, Beijing Aizhenxin and a majority of Shanghai Huaqianshu’s businesses ceased to be subject to business tax. Shanghai Miyuan became subject to a small-scale tax payer VAT at a rate of 3% in January 2012 and became subject to a general tax payer VAT at a rate of 6% in February 2013, Beijing Miyuan became subject to a small-scale tax payer VAT at a rate of 3% in September 2012 and became subject to a general tax payer VAT at a rate of 6% in January 2014, Beijing Aizhenxin became subject to VAT at a rate of 3% in September 2012 and certain businesses of Shanghai Huaqianshu became subject to a general tax payer VAT at a rate of 6% in June 2014. Jiayuan Shanghai Center, Shanghai Huaqianshu’s “event” business, Shanghai Huaqianshu’s Beijing branch, Beijing Huaqianshu and Xique continued to be subject to business tax.

Critical Accounting Policies

We prepare our financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, revenues and expenses and contingent assets and liabilities.  We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other factors that we believe to be relevant under the circumstances.  Since our financial reporting process inherently relies on the use of estimates and assumptions, our actual results could differ from what we expect.  This is especially true with some accounting policies that require higher degrees of judgment than others in their application.  We consider the policies discussed below to be critical to an understanding of our audited consolidated financial statements because they involve the greatest reliance on our management’s judgment.

Revenue Recognition and Deferred Revenue

We derive our revenues from three segments, online services, personalized matchmaking services, and events and other services.  We recognize revenues only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and the collectability of the related fee is reasonably assured.

Online Services

We offer two types of online services through all of our online platforms: message exchanging services and value-added services.  We charge for message exchanging services when a registered user initiates contact with another registered user via our online platforms and either the sender or recipient may pay for the service.  Subsequently, we do not charge for any message exchanges between these same two users.  The exchange of messages between two users on our website typically lasts only a few days.  We believe that users place the most value on the initial connection and that users interested in further interactions exchange personal contact information to communicate with each other directly.  We also offer value-added services, primarily virtual gifts, improved search rankings, improved message priority and online chatting.  In 2012, 2013 and 2014, revenues recognized from our value-added services was RMB59.2 million, RMB81.6 million and RMB95.3 million (US$15.7 million), respectively.

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We have adopted two primary fee models for our online services on our Jiayuan.com platform: a pay-per-use model and a periodic subscription model.  We have adopted a periodic subscription fee model on our izhenxin.com and qiuai.com platforms.  Online services that we offer under the pay-per-use model include improved search rankings for the duration of one day, message sending or receiving and sending virtual gifts.  As we provide these services within a short period of time, revenue is recognized when the services are rendered.  If the communication patterns of our users change, the timing of our revenue recognition for these services may be impacted and revenue may be deferred and recognized over a longer period.  On our Jiayuan.com platforms, users prepay for virtual currencies, which are used as consideration for our online services.  Until used, virtual currencies purchased by users are recorded as deferred revenue.

Under the periodic subscription model on our platforms, users pay a fixed subscription fee for certain services which are delivered over a predetermined subscription period.  Online services offered under the subscription model on our online platform include sending multiple messages a day, reading unlimited number of messages, improved search rankings for a period longer than a day, unlimited online chatting and premium user subscriptions.  Fees for subscription services are collected upfront and initially recognized as deferred revenue, and revenue is recognized proportionately over the applicable subscription periods as services are performed.

Virtual currencies can be purchased through our Jiayuan.com platform, and payments are collected directly through third-party online payment platforms or through our WVAS partners, which pay us after payment is collected.  Due to the time lag between when services are delivered and when billing statements are received from our WVAS partners, revenue from virtual currencies are estimated based on our internal billing records and billing confirmations with our WVAS partners.  We adjust discrepancies between our internal estimated revenues and actual revenues confirmed by our WVAS partners when billing statements are received.  There were no significant differences between our estimates and actual revenue confirmed by our WVAS partners as of the date of this annual report.

Users were previously able to earn loyalty points based on their activities on our Jiayuan.com platform and/or purchase of online services, and the loyalty points could be used to redeem online services once a minimum number of points have been accumulated.  Loyalty points awarded for the purchase of online services are considered to be part of the revenue generating activities, and such arrangements are considered to have multiple elements.  We estimate the selling price of each loyalty point based on the consideration users would be required to pay to purchase the underlying services if they were not redeemed using the loyalty points, and the average number of the loyalty points needed to redeem these services.  Consideration is allocated to the loyalty points using the relative selling price method and is initially recorded as deferred revenue, and revenue is recognized when the loyalty points are redeemed and services are rendered. Users were no longer able to earn new loyalty points on our Jiayuan.com platform since May 2011. Users with existing loyalty points were no longer able to redeem their loyalty points for online services on our Jiayuan.com platform since August 2011.  In 2013, we suspended the customer loyalty program. All the loyalty points expired and we recognized the deferred revenue accordingly.

We also offer web-based games and mobile games under the item-based revenue model where the basic game play functions are free of charge and players are charged for purchases of in-game virtual items or game points. Revenues of games business are included in online service revenue.

For web-based games, we cooperate with third-party game developers by entering into cooperation agreements with them. The web-based games designed, developed and hosted by these developers are made available to the players through our platforms. We view that the developers are primarily responsible for the operation of the web-based games to the players. We generally collect payments from players in connection with the sale of in-game virtual items and remit certain agreed-upon percentages of the proceeds to the game developers and record revenue net of such remittances. Revenue is recognized when the in-game virtual items are consumed.

For mobile games, we are primarily responsible for the operation and sell game points to players through third party mobile application stores. The mobile application stores remit the proceeds to us after deducting certain agreed-upon percentages of commission fees. Revenue from the sale of game points is recorded gross of the commission fees paid to mobile application stores and is recognized when the game points are consumed.

Personalized Matchmaking Services

We provide personalized matchmaking services to individual users, which consist of personalized services where our service representatives take a proactive approach in finding potential companions for our personalized matchmaking customers. Under this type of service, different types of services under customized bundled contracts are provided over the contract period, and as such, we account for the personalized matchmaking services as a single unit of accounting on a contract basis.

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In 2013, we began cooperating with matchmaking service agencies for the provision of personalized matchmaking services in China. We grant matchmaking service agencies limited rights to use our brand, trademark and certain resources under our direction in accordance with the matchmaking service agreements. We collect upfront payments from the recipients of the matchmaking services and remit the commission fees to the matchmaking service agencies at the contractual pre-determined rates. We are responsible for the determination of the service scope and price, and the signing of the service agreements and the collection of service fees from customers directly. Revenue generated from clients who receive matchmaking services through matchmaking service agencies are recognized on a gross basis as we are considered the primary obligor in the service arrangements.

Payments for personalized matchmaking services are collected upfront and initially recorded as deferred revenue, and revenue is recognized ratably over the contract service period. In addition, there are training fees charged upfront to the matchmaking service agencies, which are recognized as revenue when the training services are rendered.

Events and Other Services

We earn revenue from organizing and hosting events, including speed-dating, dance parties and other social events for our users.  Event related revenue includes revenue from ticket sales as well as sponsorship fees. Tickets are generally sold at the events, and revenue is recognized upon the conclusion of the events when services have been rendered.  For certain events where tickets are prepaid by our users, prepaid fees are initially recorded as deferred revenue and revenue is recognized upon the completion of the events.  We also generate sponsorship revenue whereby we enter into sponsorship arrangements with third-party companies to sponsors events hosted by us. Revenue from event sponsorship arrangements are recognized at the completion of the sponsored event.

Other services revenue consists of advertising revenues, which are principally derived from online advertising arrangements that allow advertisers to place advertisements on particular areas of our website, in particular formats, such as banners, links and logos, and over a specified period of time. We enter into advertising contracts to establish the fixed price and advertising services to be provided, and payment is collected upfront and initially recognized as deferred revenue.  We recognize revenue from advertising contracts on a straight-line basis over the contractual period.

Share-based Compensation

Share-based compensation expenses for employee share-based awards is determined based on fair value of the shares on the grant date. The awards are recognized as an expense using the graded vesting method, net of estimated forfeiture rate. We recognize awards with only service condition terms over the requisite service period, which is generally the vesting period.

In July 2012, our board of directors approved to amend certain option awards granted during the period from December 2010 to July 2011. In June 2013, our board of directors also approved to amend certain option awards granted in June 2007.  In October 2014, our board of directors further approved to amend all unexercised option awards as of October 10, 2014.  Such modifications were accounted for pursuant to ASC 718 under U.S. GAAP. The incremental fair value before and after the modification was recognized as follows: (a) for vested options, the incremental share-based compensation expenses were recognized immediately; and (b) for non-vested options, the incremental share-based compensation expenses are recognized in the statement of comprehensive income over the remaining vesting period.

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We used the binomial option pricing model, or binomial model, to determine the fair value of stock options, which uses certain assumptions and requires management to make estimations. We estimated the expected volatility of our future share price based on the price volatility of the publicly traded shares of comparable listed companies over the most recent period to be equal to the expected option life of our employees’ share options as well as the historical volatility of our ADS, since January 1, 2012. We estimated the risk-free interest rate based on the market yield of the US dollar denominated China International Government Bond with a maturity comparable to the contractual life of the option.  We incorporated the employees’ early exercise behavior by assuming that early exercise happens when the share price is a certain multiple of the exercise price.  We estimated the multiple of the exercise price using considerations from an empirical research study regarding exercise patterns based on historical statistical data.  An exercise multiple of 2.8 was used for all options as of each grant date. Expected forfeiture rate was estimated based on our understanding in the human resources market and the staff turnover rate of our company. The annual staff turnover rate was estimated at 5% for periods after June 2007 and we are required to true-up forfeiture estimates for all awards with service conditions through the vesting date so that compensation cost is recognized only for awards that vest.  For the options granted before 2013, we had no history or expectation of paying dividends on our ordinary shares.  For the options granted in 2013 and 2014, 5% and 4% dividend yield was assumed in the estimation, respectively, considering our plan to distribute annual dividends in 2013 and thereafter.

Since our ADSs were listed on the NASDAQ Global Select Market in May 2011, we have determined the estimated fair value of our ordinary shares underlying the options based on the closing trading price of our ADSs as of the option grant date.

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Consolidation of Affiliated Entities

PRC law currently restricts foreign ownership of Internet content distribution businesses (including operation of online games) and prohibits privately funded non-enterprise institutions from engaging in profit making business operations in China.  To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provide Internet content services in China, we provide services through Shanghai Huaqianshu, Beijing Huaqianshu, Xique and Beijing Aizhenxin which hold the licenses and approvals to provide Internet content services in China. We also provide certain matchmaking services through Jiayuan Shanghai Center which holds the licenses and approvals to provide matchmaking services in Shanghai.  We operate our online game business through Shanghai Huaqianshu which holds the Online Culture Operating Permit for online games and is in the process of filing applications for issuance of virtual currencies and applying for Internet Publication License. We have entered into a series of contractual arrangements with Shanghai Huaqianshu, Beijing Huaqianshu, Xique, Beijing Aizhenxin and their respective equity owners and Jiayuan Shanghai Center.  As a result of these contractual arrangements, we have the ability to effectively control Shanghai Huaqianshu, Beijing Huaqianshu, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center, and accordingly, each of Shanghai Huaqianshu, Beijing Huaqianshu, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center is a VIE of our company.  As we are deemed to have the power to direct the economic activities most significant to Shanghai Huaqianshu, Beijing Huaqianshu, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center and the right to obtain substantially all of the economic benefits and obligation to fund substantially all of the losses, we are considered to be the primary beneficiary of our VIE, and therefore we consolidated the results in our consolidated financial statements under U.S. GAAP.

We have consulted our PRC legal counsel in assessing our ability to control our PRC operating companies and Jiayuan Shanghai Center through these contractual arrangements.  Any changes in PRC laws and regulations that affect our ability to control our PRC operating companies and Jiayuan Shanghai Center may preclude us from consolidating these companies in the future.

Impairment of Long-Lived Assets and Intangible Assets

We review long-lived assets and intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.  Recoverability of these assets is measured by comparing their carrying amounts to the future undiscounted cash flows the assets are expected to generate.  If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, we recognize an impairment loss equal to the amount by which the carrying value of the asset exceeds its fair value.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of our business combinations. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. We test for goodwill impairment using the two-step method. Under the first step, the fair value of each reporting unit is compared to the carrying amount of the goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step is not required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for the purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill.

Income Taxes

We follow the asset and liability method of accounting for income taxes.  Deferred income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our financial statements or tax returns.  Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period that includes the enactment date.  A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized.

Valuation Allowance Against Deferred Tax Assets

As of December 31, 2014, we recorded valuation allowance of RMB20.5 million (US$3.3 million), primarily attributed to (i) the excess amount of deductible advertising expenses which is not expected to be utilized in the foreseeable future, and (ii) net operating losses in certain PRC entities. We evaluate a variety of factors in determining the amount of the valuation allowance to record, including each entity’s operating performance and accumulated deficit, existence of taxable temporary differences and reversal periods. We record valuation allowance to offset deferred tax assets to the amount that we believe is more-likely-than-not to be realized. In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income in those jurisdictions where the deferred tax assets are generated from. In the event we are to determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to deferred tax assets would be recorded in our statement of operations in the period in which we make such a determination. Likewise, if we later determine that it is more likely than not that the deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance.

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Uncertain Tax Positions

The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures.  Significant judgment is required in evaluating our uncertain tax positions and determining its provision for income taxes.  We did not have any significant interest and penalties associated with uncertain tax positions in 2012, 2013 and 2014.  As of December 31, 2014, we did not have any significant unrecognized uncertain tax positions.

Consolidated Results of Comprehensive Income

The following table sets forth a summary of our consolidated statements of comprehensive income for the periods indicated.

	For the year ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
	(in thousands, except share and per share and per ADS data)
Consolidated Statement of Comprehensive Income Data:
Net revenues	410,803		492,606		613,990		98,957
Cost of revenues	(143,685	)	(180,521	)	(277,789	)	(44,772	)
Gross profit	267,118		312,085		336,201		54,185
Operating expenses:
Selling and marketing expenses	(143,376	)	(183,619	)	(252,736	)	(40,734	)
General and administrative expenses	(54,367	)	(52,565	)	(58,071	)	(9,359	)
Research and development expenses	(17,587	)	(21,918	)	(23,149	)	(3,731	)
Total operating expenses	(215,330	)	(258,102	)	(333,956	)	(53,824	)
Operating income	51,788		53,983		2,245		361
Interest income	13,323		11,687		17,658		2,846
Foreign currency exchange (loss)/income, net	(1,845	)	1,935		(1,361	)	(219	)
Other income, net	4,898		9,104		4,572		737
Income before income tax	68,164		76,709		23,114		3,725
Income tax expenses	(9,227	)	(13,053	)	(3,007	)	(485	)
Net income	58,937		63,656		20,107		3,240

2014 compared to 2013

Net Revenues.  Our total net revenues increased by 24.6% from RMB492.6 million in 2013 to RMB614.0 million (US$99.0 million) in 2014.

·Net revenues from online services were RMB425.5 million (US$68.6 million), or 69.3% of our net revenues, in 2014, compared to RMB422.1 million, or 85.7% of our net revenues, in 2013.  The 0.8% increase in our net revenues from online services in 2014, compared to 2013, resulted primarily from an increase in the number of paying users.  Average monthly paying user accounts increased by 12.8% from 1,339,258 in 2013 to 1,510,919 in 2014.

·Net revenues from personalized matchmaking services were RMB164.6 million (US$26.5 million), or 26.8% of our net revenues, in 2014, compared to RMB52.5 million, or 10.6% of our net revenues, in 2013.  The 213.8% increase in our net revenues from personalized matchmaking services in 2014, compared to 2013, resulted primarily from the increase in the number of average monthly personalized matchmaking customers in connection with Jiayuan’s strategy of developing personalized matchmaking service centers in more cities in the PRC.

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·Net revenues from events and other services were RMB23.8 million (US$3.8 million), or 3.9% of our net revenues, in 2014, compared to RMB18.1 million, or 3.7% of our net revenues, in 2013. The 32.0% increase in our net revenues from events and other services in 2014, compared to 2013, resulted primarily from the increase in online advertising associated with event sponsorship arrangements.

Cost of Revenues.  Our total cost of revenues increased by 53.9% to RMB277.8 million (US$44.8 million) in 2014 from RMB180.5 million in 2013.  This increase resulted primarily from increases in personnel costs, fees to third-party payment providers, broadband rental and network costs and commissions paid to third-party personal matchmaking service agencies.

·Cost of revenues from online services was RMB148.8 million (US$24.0 million) in 2014, compared to RMB141.0 million in 2013.  Our cost of revenues from online services, which primarily comprises of fees to third-party payment providers, personnel costs, broadband rental and network costs, is related to the number of active user accounts as well as the manner by which paying user accounts pay for our services.  Our cost of revenues from online services grew in absolute amounts in 2014 and increased as a percentage of our net revenues from online services to 35.0% in 2014 from 33.4% in 2013 primarily due to the increase in the commission rates charged by our WVAS partners and the increase in personnel cost due to the continued development of our online businesses.

·Cost of revenues from personalized matchmaking services was RMB117.1 million (US$18.9 million) in 2014, compared to RMB29.8 million in 2013.  The 292.9% increase in our cost of revenues from personalized matchmaking services in 2014, compared to 2013, resulted primarily from the commissions paid to third-party outsourced personal matchmaking service agencies in line with the rapid expansion of personalized matchmaking services and increased personnel costs in 2014.

·Cost of revenues from events and other services was RMB11.9 million (US$1.9 million) in 2014, compared to RMB9.8 million in 2013. The 22.2% increase in our cost of revenues from events and other services in 2014, compared to 2013, resulted primarily from the increase in personnel costs.

Gross Profit and Gross Margin.  As a result of the foregoing, our gross profit increased by 7.7% to RMB336.2 million (US$54.2 million) in 2014 from RMB312.1 million in 2013.  Our gross margin decreased to 54.8% in 2014 from 63.4% in 2013.  This decrease was attributable primarily to personalized matchmaking service agencies as well as the increase in commissions rates paid to our WVAS partners.

·Gross profit in online services decreased to RMB276.7 million (US$44.6 million) in 2014 from RMB281.1 million in 2013.  Gross margin in online services decreased to 65.0% in 2014 from 66.6% in 2013, primarily due to an increase in the commission rates we paid to our WVAS partners.

·Gross profit in personalized matchmaking services increased to RMB47.5 million (US$7.7 million) in 2014 from RMB22.7 million in 2013.  Gross margin in personalized matchmaking services decreased to 28.9% in 2014 from 43.2% in 2013.  The decrease in gross margin resulted primarily from the increased commissions we paid to outsourced personalized matchmaking service centers due to our expended number of service locations and cities in which we offer personalized matchmaking services in 2014.

·Gross profit in events and other services increased to RMB11.9 million (US$1.9 million) in 2014 from RMB8.3 million in 2013.  Gross margin in events and other services increased to 50.0% in 2014 from 46.0% in 2013.  The increase in gross margin resulted primarily from the increase in online advertising associated with event sponsorship arrangements.

Operating Expenses.  Our total operating expenses increased by 29.4% to RMB334.0 million (US$53.8 million) in 2014 from RMB258.1 million in 2013.  This increase was primarily due to increases in our selling and marketing expenses.

·Selling and Marketing Expenses.  Our selling and marketing expenses increased by 37.6% to RMB252.7 million (US$40.7 million) in 2014 from RMB183.6 million in 2013.  This increase resulted primarily due to television brand advertising campaigns conducted in the first and third quarters of 2014 as well as from greater online spending on new user acquisitions, in particular on commercial search engines, navigation sites, application download stores and Internet portals, due to the increase in advertising fees charged by such third-party service providers.  Selling and marketing expenses through online channels such as on commercial search engines, navigation sites, application download stores and Internet portals increased to RMB162.6 million (US$26.2 million) in 2014 from RMB143.9 million in 2013 while selling and marketing expenses on television and offline brand building efforts increased to RMB69.9 million (US$11.3 million) in 2014 from RMB22.2 million in 2013.  Our selling and marketing expenses increased as a percentage of our net revenues, amounting to 41.2% of our net revenues in 2014, compared to 37.3% of our net revenues in 2013, primarily due to the increase in advertising fees charged by third-party advertising service providers.

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·General and Administrative Expenses.  Our general and administrative expenses increased by 10.5% to RMB58.1 million (US$9.4 million) in 2014 from RMB52.6 million in 2013.  This increase resulted primarily from the additional provision for specific doubtful accounts increased to RMB1.1 million (US$0.2 million) in 2014 from RMB0.1 million in 2013 and the increase in head count and related salary and benefit expense in 2014. Our general and administrative expenses decreased as a percentage of our net revenues, amounting to 9.5% of our net revenues in 2014, compared to 10.7% of our net revenues in 2013.

·Research and Development Expenses.  Our research and development expenses increased by 5.6% to RMB23.1 million (US$3.7 million) in 2014 from RMB21.9 million in 2013.  This increase was primarily due to an increase in the number of our research and development personnel as well as an increase in average salary for such personnel.

Operating Income and Operating Margin.  As a result of the foregoing, our operating income decreased by 95.8% to RMB2.2 million (US$0.4 million) in 2014 from RMB54.0 million in 2013.  Our operating margin decreased to 0.4% in 2014 from 11.0% in 2013, resulting primarily from the increase in advertising fees on new user acquisitions and offline brand building expenses.

Interest Income.  Our interest income increased by 51.1% to RMB17.7 million (US$2.8 million) in 2014 from RMB11.7 million in 2013 resulting primarily due to an increase in our average cash balance for the year.

Foreign Currency Exchange (Loss)/Income, Net.  Foreign currency exchange loss, net, was RMB1.4 million (US$0.2 million) in 2014 compared to a foreign currency exchange income, net, of RMB1.9 million in 2013 primarily as a result of the depreciation of the Renminbi against the U.S. dollar in 2014.  A portion of the net proceeds from our initial public offering has been converted into Renminbi and are being held by our foreign subsidiaries whose functional currencies are the U.S. dollar.

Other Income, Net.  Our other income, net, decreased to RMB4.6 million (US$0.7 million) in 2014 from RMB9.1 million in 2013 resulting primarily due to the decrease in government subsidy we received in 2014 in relation to local policies promoting high technology enterprises.

Income Tax Expenses.  Our income tax expenses decreased by 77.0% to RMB3.0 million (US$0.5 million) in 2014 from RMB13.1 million in 2013 primarily as a result of the decrease in income before income tax.

Net Income and Net Margin.  As a result of the foregoing, our net income decreased by 68.4% to RMB20.1 million (US$3.2 million) in 2014 from RMB63.7 million in 2013.  Our net margin decreased to 3.3% in 2014 from 12.9% in 2013.

2013 compared to 2012

Net Revenues.  Our total net revenues increased by 19.9% from RMB410.8 million in 2012 to RMB492.6 million in 2013.

·Net revenues from online services were RMB422.1 million, or 85.7% of our net revenues, in 2013, compared to RMB362.5 million, or 88.2% of our net revenues, in 2012.  The 16.4% increase in our net revenues from online services in 2013, compared to 2012, resulted primarily from a higher number of paying users and an increase of ARPU from RMB24.7 in 2012 to RMB25.9.  Average monthly paying user accounts increased by 9.3% from 1,224,890 in 2012 to 1,339,258 in 2013.

·Net revenues from personalized matchmaking services were RMB52.5 million, or 10.6% of our net revenues, in 2013, compared to RMB33.1 million, or 8.1% of our net revenues, in 2012.  The 58.3% increase in our net revenues from personalized matchmaking services in 2013, compared to 2012, resulted primarily from the increase in the number of average monthly personalized matchmaking customers in connection with Jiayuan’s strategy of developing personalized matchmaking service centers in more cities in the PRC.

·Net revenues from events and other services were RMB18.1 million, or 3.7% of our net revenues, in 2013, compared to RMB15.2 million, or 3.7% of our net revenues, in 2012. The 19.1% increase in our net revenues from events and other services in 2013, compared to 2012, resulted primarily from the increase in online advertising associated with event sponsorship arrangements.

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Cost of Revenues.  Our total cost of revenues increased by 25.6% to RMB180.5 million in 2013 from RMB143.7 million in 2012.  This increase resulted primarily from increases in personnel costs, fees to third-party payment providers, broadband rental and network costs, commissions paid to third-party personal matchmaking service agencies and depreciation expenses.

·Cost of revenues from online services was RMB141.0 million in 2013, compared to RMB117.8 million in 2012.  Our cost of revenues from online services, which primarily comprises of fees to third-party payment providers, personnel costs, broadband rental and network costs, is related to the number of active user accounts as well as the manner by which paying user accounts pay for our services.  Our cost of revenues from online services grew in absolute amounts in 2013 and increased as a percentage of our net revenues from online services to 33.4% in 2013 from 32.5% in 2012 due to the increase in percentage of user payments through telecommunications operators and the resulting higher commissions charged by our WVAS partners for these payments compared to online banking and online payment providers.

·Cost of revenues from personalized matchmaking services was RMB29.8 million in 2013, compared to RMB15.9 million in 2012.  The 87.3% increase in our cost of revenues from personalized matchmaking services in 2013, compared to 2012, resulted primarily from the increased personnel costs and commissions paid to third-party personal matchmaking service agencies in line with the rapid expansion of personalized matchmaking services in 2013.

·Cost of revenues from events and other services was RMB9.8 million in 2013, compared to RMB10.0 million in 2012. The 2.0% decrease in our cost of revenues from events and other services in 2013, compared to 2012, resulted primarily from a decrease in the number of the events we held to 763 in 2013 from 859 in 2012.

Gross Profit and Gross Margin.  As a result of the foregoing, our gross profit increased by 16.8% to RMB312.1 million in 2013 from RMB267.1 million in 2012.  Our gross margin decreased to 63.4% in 2013 from 65.0% in 2012.  This decrease was attributable primarily to the increase in the percentage of user payments through telecommunications operators and the resulting higher commissions paid to our WVAS partners.

·Gross profit in online services increased to RMB281.1 million in 2013 from RMB244.7 million in 2012.  Gross margin in online services decreased to 66.6% in 2013 from 67.5% in 2012, primarily due to the increase in percentage of user payments through telecommunications operators and the resulting higher commission rate we paid to our WVAS partners.

·Gross profit in personalized matchmaking services increased to RMB22.7 million in 2013 from RMB17.2 million in 2012.  Gross margin in personalized matchmaking services decreased to 43.2% in 2013 from 52.0% in 2012.  The decrease in gross margin resulted primarily from the commissions we paid to personalized matchmaking service centers in 2013.

·Gross profit in events and other services increased to RMB8.3 million in 2013 from RMB5.2 million in 2012.  Gross margin in events and other services increased to 46.0% in 2013 from 34.4% in 2012.  The increase in gross margin resulted primarily from the increase in online advertising associated with event sponsorship arrangements.

Operating Expenses.  Our total operating expenses increased by 19.9% to RMB258.1 million in 2013 from RMB215.3 million in 2012.  This increase was primarily due to increases in our selling and marketing expenses.

·Selling and Marketing Expenses.  Our selling and marketing expenses increased by 28.1% to RMB183.6 million in 2013 from RMB143.4 million in 2012.  This increase resulted primarily from greater online spending on new user acquisitions, in particular on commercial search engines, navigation sites, application download stores and Internet portals due to the increase in advertising fees charged by such third-party service providers.  Selling and marketing expenses through online channels such as on commercial search engines, navigation sites, application download stores and Internet portals increased to RMB143.9 million in 2013 from RMB117.6 million in 2012 while selling and marketing expenses on offline brand building efforts increased to RMB22.2 million in 2013 from RMB13.4 million in 2012.  Our selling and marketing expenses increased as a percentage of our net revenues, amounting to 37.3% of our net revenues in 2013, compared to 34.9% of our net revenues in 2012, primarily due to the increase in advertising fees charged by third-party advertising service providers.

·General and Administrative Expenses.  Our general and administrative expenses decreased by 3.3% to RMB52.6 million in 2013 from RMB54.4 million in 2012.  This decrease resulted primarily from a decrease in professional fees from RMB16.4 million in 2012 to RMB13.5 million in 2013, including legal fees and audit fees. Our general and administrative expenses decreased as a percentage of our net revenues, amounting to 10.7% of our net revenues in 2013, compared to 13.2% of our net revenues in 2012.

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·Research and Development Expenses.  Our research and development expenses increased to RMB21.9 million in 2013 from RMB17.6 million in 2012.  This increase was primarily due to an increase in the number of our research and development personnel as well as an increase in average salary for such personnel.

Operating Income and Operating Margin.  As a result of the foregoing, our operating income increased by 4.2% to RMB54.0 million in 2013 from RMB51.8 million in 2012.  Our operating margin decreased to 11.0% in 2013 from 12.6% in 2012, resulting primarily from the increase in advertising fees on new user acquisitions.

Interest Income.  Our interest income decreased by 12.3% to RMB11.7 million in 2013 from RMB13.3 million in 2012 resulting primarily from a decrease in deposits placed in banks due to the purchase of our new office space.

Foreign Currency Exchange (Loss)/Income, Net.  Foreign currency exchange income, net, was RMB1.9 million in 2013 compared to a foreign currency exchange loss of RMB1.8 million in 2012 primarily as a result of the appreciation of the Renminbi against the U.S. dollar in 2013.  A portion of the net proceeds from our initial public offering has been converted into Renminbi and are being held by our foreign subsidiaries whose functional currencies are the U.S. dollar.

Other Income, Net.  Our other income, net, increased to RMB9.1 million in 2013 from RMB4.9 million in 2012.  The increase was primarily due to a government subsidy we received in 2013 in relation to local policies promoting high technology enterprises.

Income Tax Expenses.  Our income tax expenses increased by 41.5% to RMB13.1 million in 2013 from RMB9.2 million in 2012 primarily as a result of withholding taxes we accrued in connection with our plan to repatriate PRC earnings as cash dividends.

Net Income and Net Margin.  As a result of the foregoing, our net income increased by 8.0% to RMB63.7 million in 2013 from RMB58.9 million in 2012.  Our net margin decreased to 12.9% in 2013 from 14.3% in 2012.

B.Liquidity and Capital Resources

Cash Flows and Working Capital

To date, we have financed our operations primarily through cash generated from operations, the issuance of Series A preferred shares and our initial public offering.  All of our Series A preferred shares were automatically converted into ordinary shares immediately upon the completion of our initial public offering in May 2011. Our cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have maturities of three months or less when purchased.  As of December 31, 2012, 2013 and 2014, we had RMB257.7 million, RMB232.6 million and RMB196.9 million (US$31.7 million) in cash and cash equivalents, respectively.  As of December 31, 2012, 2013 and 2014, we had RMB233.0 million, RMB336.3 million and RMB239.5 million (US$38.6 million) of short-term deposits, respectively.  We anticipate that our primary sources of liquidity will come from cash flow from operations.

We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including for working capital and capital expenditures, for at least the next 12 months.  We may, however, require additional cash resources due to changed business conditions or other future developments.  If these sources are insufficient to satisfy our cash requirements, we may seek to sell debt securities or additional equity securities or obtain short-term or long-term bank financing.  The sale of convertible debt securities or additional equity securities could result in additional dilution to our shareholders.  The incurrence of indebtedness would result in debt service obligations and could result in operating and financial covenants that would restrict our operations.  We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

From time to time, we evaluate possible investments or acquisitions and may, if a suitable opportunity arises, make an investment or acquisition or conduct a divestment.

The following table sets forth information relating to our cash flows for the periods presented:

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	For the year ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
	(in thousands)
Net cash provided by operating activities	57,685		166,967		77,198		12,441
Net cash provided by/(used in) investing activities	78,960		(111,747	)	70,258		11,323
Net cash used in financing activities	(57,659	)	(73,234	)	(183,627	)	(29,595	)
Effect of exchange rate changes on cash and cash equivalents	(2,617	)	(7,082	)	415		69
Net increase/(decrease) in cash and cash equivalents	76,369		(25,096	)	(35,756	)	(5,762	)
Cash and cash equivalents at beginning of year	181,340		257,709		232,613		37,490
Cash and cash equivalents at end of year	257,709		232,613		196,857		31,728

Operating Activities

Net cash provided by operating activities amounted to RMB77.2 million (US$12.4 million) in 2014, primarily attributable to deferred revenue of RMB63.3 million (US$10.2 million), net income of RMB20.1 million (US$3.2 million), accounts payable of RMB15.1 million (US$2.4 million), depreciation and amortization of RMB14.4 million (US$2.3 million), and share-based compensation expenses of RMB9.6 million (US$1.5 million). This was partially offset by prepaid expenses and other current assets of RMB44.7 million (US$7.2 million). The increase in our deferred revenue was primarily due to the significant increase in prepayments for our personalized matchmaking services in connection with Jiayuan’s strategy of developing personalized matchmaking service centers in more cities in the PRC. The increase in our prepaid expenses and other current expenses was primarily due to the significant increase in prepaid commissions to matchmaking service agencies.

Net cash provided by operating activities amounted to RMB167.0 million in 2013, primarily attributable to net income of RMB63.7 million, prepaid expenses and other current assets of RMB20.9 million, accrued expenses and other current liabilities of RMB18.9 million, depreciation and amortization of RMB16.2 million, deferred revenue of RMB15.2million, share-based compensation expenses of RMB10.4 million, income tax payable of RMB9.7 million, net accounts receivable of RMB6.1 million and accounts payable of RMB4.5 million. The decrease in net income was primarily due to the significant increase in advertising expenses.  The increase in our deferred revenue was primarily due to the significant increase in prepayments for personalized matchmaking services.  The increase in our prepaid expenses and other current expenses was primarily due to the significant increase in prepaid commissions to matchmaking service agencies.

Net cash provided by operating activities amounted to RMB57.7 million in 2012, primarily attributable to net income of RMB58.9 million, deferred revenue of RMB32.0 million, depreciation and amortization of RMB13.4 million and share-based compensation expenses of RMB13.4 million. This was partially offset by prepaid expenses and other current assets of RMB31.7 million, net accounts receivable in the amount of RMB23.8 million, accrued expenses and other current liabilities of RMB5.4 million and income tax payable of RMB2.3 million. The increase in our deferred revenue was primarily due to the significant increase in prepayments for our online services such as purchases of virtual currencies and periodic subscription fees in connection with the increase in our revenue. The increase in our prepaid expenses and other receivables was primarily due to prepaid advertising expenses of RMB25.6 million as a result of our business expansion.

Investing Activities

Net cash used in or provided by investing activities largely reflects our cash management, and to a lesser extent our purchases of equipment in connection with our servers and computers.

Net cash provided by investing activities was RMB70.3 million (US$11.3 million) in 2014, primarily attributable to the maturity of short-term deposits totaling RMB336.3 million (US$54.2 million), partially offset by the placement of short-term deposits in the amount of RMB239.5 million (US$38.6 million), investment in equity investee in the amount of RMB11.0 million (US$1.8 million) as well as available-for-sale securities in the amount of RMB10.0 million (US$1.6 million).

Net cash used in investing activities was RMB111.7 million in 2013, primarily attributable to the placement of short-term deposits totaling RMB326.3 million and purchases of equipment totaling RMB18.2 million, partially offset by the maturity of short-term deposits in the amount of RMB233.0 million.

Net cash provided by investing activities was RMB79.0 million in 2012, primarily attributable to the maturity of short-term deposits totaling RMB404.5 million, partially offset by placement of short-term deposits in the amount of RMB233.0 million and purchases of property and equipment totaling RMB83.1 million.

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Financing Activities

Net cash used in financing activities in 2014 was RMB183.6 million (US$29.6 million), primarily attributable to dividend payments in the amount of RMB166.0 million (US$26.7 million) and repurchases of our ordinary shares in the amount of RMB26.4 million (US$4.3 million), partially offset by payments received in the amount of RMB8.7 million (US$1.4 million) relating to issuances of ordinary shares in connection with the exercise of share options.

Net cash used in financing activities in 2013 was RMB73.2 million, primarily attributable to dividend payments in the amount of RMB48.2 million and repurchases of our ordinary shares in the amount of RMB33.1 million, partially offset by payments received in the amount of RMB8.1 million relating to issuances of ordinary shares in connection with the exercise of share options.

Net cash used in financing activities in 2012 was RMB57.7 million, primarily reflecting repurchases of our ordinary shares in the amount of RMB63.7 million, partially offset by payments received in the amount of RMB6.0 million relating to issuances of ordinary shares in connection with the exercise of share options.

Capital Expenditures

Our capital expenditures amounted to RMB16.6 million (US$2.7 million) in 2014.  Our capital expenditures in 2014 were used primarily in relation to the acquisition of equity investee and the fixed assets.

Our capital expenditures amounted to RMB87.6 million and RMB18.5 million in 2012 and 2013, respectively.  Our capital expenditures in 2012 were used primarily to purchase our new office building, intangible assets, servers and computer equipment for the further expansion of our business.  Our capital expenditures in 2013 were used primarily to purchase servers and computer equipment for the further expansion of our business and to fit-out our new office building.

Restrictions on Cash Transfers to Us

To fund any cash requirements we may have from time to time, we may need to rely on dividends, loans or advances made to us by our PRC subsidiaries.  We conduct substantially all of our operations through our PRC operating companies and Jiayuan Shanghai Center which generate substantially all of our revenues.  As our PRC operating companies are not owned by our PRC subsidiaries, they are unable to make dividend payments to our PRC subsidiaries.  Instead, our PRC subsidiaries have entered into contractual arrangements with their corresponding PRC operating companies and Jiayuan Shanghai Center to provide services to our PRC operating companies and Jiayuan Shanghai Center in return for cash payments.  In order for us to receive any dividends, loans or advances from our PRC subsidiaries, or to distribute any dividends to our shareholders and ADS holders, we will need to rely on these payments made from our PRC operating companies and Jiayuan Shanghai Center to our PRC subsidiaries .  Depending on the nature of services provided by our PRC subsidiaries to our PRC operating companies and Jiayuan Shanghai Center certain of these payments are subject to PRC taxes, including business taxes and value-added tax, which effectively reduce the amount that our PRC subsidiaries receive from our PRC operating companies and Jiayuan Shanghai Center.  In addition, the PRC government could impose restrictions on such payments or change the tax rates applicable to such payments.  See “Item 3. Key Information — D. Risk Factors—Risks Relating to Regulation of Our Business and to Our Structure—Our holding company structure may restrict our ability to receive dividends from, or transfer funds to, our PRC subsidiaries, which could restrict our ability to act in response to changing market conditions and reallocate funds among our Chinese entities in a timely manner.”

Regulations in the PRC currently permit payment of dividends of a PRC company, such as our PRC subsidiaries, only out of accumulated profits as determined in accordance with accounting standards and regulations in China.  Each of our PRC subsidiaries is also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until the cumulative amount reaches 50% of its registered capital. As a result of these and other restrictions under PRC laws and regulations, our PRC subsidiaries and operating companies are restricted in their ability to transfer net assets to us in terms of cash dividends, loans or advances.  Such restrictions amounted to approximately RMB122.0 million, RMB120.5 million and RMB113.8 million (US$18.3 million) as of December 31, 2012, 2013 and 2014, respectively.  These reserves are not distributable as cash dividends, or as loans or advances.  Our PRC operating companies may also allocate a portion of its after-tax profits, as determined by its board of directors, to its staff welfare and bonus funds, which may not be distributed to us.  In addition, if any of our PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

Any dividends paid by our PRC subsidiaries to Jiayuan Hong Kong will be subject to a withholding tax at the rate of five to ten percent, which will reduce the amount of cash available for distribution to us.

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Furthermore, under regulations of the SAFE, the Renminbi is not convertible into foreign currencies for capital account items, such as loans, repatriation of investments and investments outside of China, unless the prior approval of the SAFE is obtained and prior registration with the SAFE is made.

We do not expect any of such restrictions or taxes to have a material impact on our ability to meet our cash obligations.

C.Research and Development, Patents and Licenses, etc.

Technology and Research and Development

We have implemented numerous platform management, search, customer interaction and order processing and fulfillment services and systems using a combination of our own proprietary technologies and commercially available licensed technologies.  We place great emphasis on the speed and performance of our platform to enhance our user’s online experience and attract more users.

Our technology infrastructure provides for continuous availability of our online service.  We provide redundancy backup for all of the critical components of our system, which allows us to withstand unexpected component failure and to undergo maintenance or upgrades.  Our system hardware is located at three separate sites in Beijing. In addition, we also set up a data backup center in the city of Shijiazhuang in Hebei Province in 2013. Systems administrators and network managers at our Beijing office monitor our servers, operate our network and execute backups.  We operate our database and web servers using clustering technology for effective load-balancing and fault tolerance.

Regular capacity planning allows us to quickly upgrade existing hardware and integrate new hardware to react quickly to a rapidly expanding user base and increased traffic to our sites.  Key content management components are designed, developed and deployed by our in-house technology group.  We also license commercially available technology when appropriate in lieu of dedicating our own human or financial resources to developing the technology.

As of December 31, 2014, we employed 32 technology employees who focus on the maintenance of our software and hardware infrastructure.  Our network infrastructure is designed to deliver high levels of availability, performance, security and scalability.  Our network infrastructure is based on a free, open source software bundle commonly referred to as “LAMP,” which consists of a software combination using a Linux operating system, Apache HTTP Server web server software, MySQL database management system and PHP, Perl and/or Python programming language.  Our infrastructure is designed for maximum flexibility and scalability, which we believe facilitates the addition of new features.  Our user support team regularly seeks feedback on the quality of our platform, which help us make improvements to our infrastructure.

We employ several layers of security to protect data transmission and prevent unauthorized access.  We keep all of our production servers behind firewalls for security purposes and do not allow outside access, at the operating systems level, except via special secure channels.  We have employees designated to monitor security on our networks.  We record user activity and have a centralized system to verify user identification and to monitor inappropriate use.

As of December 31, 2014, we had a technology research, development and platform maintenance team of 103 engineers with experience and expertise in the fields of computing science and software development.  Our research and development efforts are also focused on keeping pace with technological advances in order to make our products and services competitive in the market, such as making our online dating services accessible through wireless devices as well as developing new products targeting different market segments. Since feature and functionality development and keeping pace with technological advances are critical elements to our strategy, we plan to further expand our research and development team.  We also have software in place to monitor potential employee misuse of information provided by our users.

Our research and development expenses were RMB17.6 million, RMB21.9 million and RMB23.1 million (US$3.7 million) in 2012, 2013 and 2014, respectively.

D.Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2014 to December 31, 2014 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

E.Off-Balance Sheet Commitments and Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.  In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.  Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets.  Moreover, we do not have any variable interest in any unconsolidated entity that is held by, and material to, us that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

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F.Tabular Disclosure of Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2014:

	Payment Due by Period
	Total	Less than 1 Year	1-3 Years	3-5 Years	More than 5 Years
	(RMB in thousands)
Operating lease obligations	14,295	8,463	5,832	—	—

Our operating lease obligations consist of office lease obligations for our offices in various locations across China. These leases expire at different times from June 2015 through December 2017 and will become subject to renewal. We intend to evaluate the need to renew each office lease on a case-by-case basis within a reasonable time prior to its expiration.

As of December 31, 2014, other than operating lease obligations, we did not have any other contractual obligations, including long-term debt obligations or purchase obligations.

G.Safe Harbor

This annual report contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. All statements other than statements of historical fact in this annual report are forward-looking statements. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “will,” or other similar expressions. The forward-looking statements included in this annual report relate to, among others:

·our future business development, financial condition and results of operations;

·our ability to maintain and strengthen our position as the leading provider of online dating services in China;

·our ability to develop and commercialize additional online dating services;

·market acceptance of our online dating services;

·our various initiatives to implement our business strategies to expand our business;

·competition from other online dating service providers and operators;

·the expected growth of and change in the online dating services industry in China;

·our ability to effectively protect our intellectual property rights and not infringe on the intellectual property rights of others; and

·the PRC laws, regulations and policies relating to the Internet and Internet content providers, including online dating service providers and operators.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in Item 3.D “Key Information — Risk Factors” and other sections in this annual report.

The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

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Item 6.Directors, Senior Management and Employees.

A.Directors and Senior Management

The following table sets forth certain information relating to our directors and executive officers as of the date of this annual report.  The business address of all of our directors and executive officers is 15/F, Anhua Development Building, No. 35 Anding Road, Chaoyang District, Beijing, People’s Republic of China.

Name	Age	Position
Yongqiang Qian	42	Director, Chairman of the Board
JP Gan	43	Independent Director
Xiaochuan Wang	36	Independent Director
Paul Keung	44	Independent Director
Gaofei Wang	36	Independent Director
Linguang Wu	43	Director, Chief Executive Officer
Shang-Hsiu Koo	34	Chief Financial Officer
Hui Song	35	Senior Vice President of Finance and Accounting

Yongqiang Qian has been the chairman of our board of directors since 2007 and co-chairman of our board of directors since December 2012.  Prior to joining our board, Mr. Qian was a board member and vice president of New Oriental Education & Technology Group, a U.S. publicly-listed company, which he co-founded in November 1993, and served as a vice principal of Beijing New Oriental School and chief executive officer of New Oriental Online from 1993 to 2006.  Mr. Qian was the chairman of the board of Beijing Liandong Weiye Technology Development Co., Ltd.  Mr. Qian was a founder of New Oriental Online and established New Oriental Online’s distance education service and online book store in June 2000.  Mr. Qian received an MBA degree from the School of Management of Yale University in 2000 and graduated from North China University of Technology in 1994.

JP Gan has served as a director of our company since 2007 and as an independent director since May 2012.  Mr. Gan is a managing director and has served as a member of the investment committee of Qiming Venture Partners.  From 2005 to 2006, Mr. Gan was the chief financial officer of KongZhong Corporation, a Nasdaq-listed wireless Internet company.  Prior to joining KongZhong Corporation, Mr. Gan was a director of the Carlyle Group responsible for venture capital investments in the Greater China region from 2000 to 2005.  Mr. Gan worked in the investment banking division of Merrill Lynch in Hong Kong from 1999 to 2000 and worked at PricewaterhouseCoopers LLP in the United States from 1994 to 1997.  Mr. Gan is a member of the board of directors of Taomee Holdings Ltd. and Ctrip.com International Limited, both of which are U.S. publicly-listed companies.  He obtained an MBA degree from the University of Chicago Graduate School of Business in 1999 and a bachelor of business administration from the University of Iowa in 1994.

Xiaochuan Wang has served as our independent director since May 2012.  Mr. Xiaochuan Wang has been the chief executive officer of Sogou.com, or Sogou, a business unit of NASDAQ-listed Sohu.com Inc., or Sohu, since August 2010. In this role, he has led the development of a range of popular Sogou-branded products, including a search engine, Chinese character input tool and web browser. Mr. Wang also currently serves as chief technology officer at Sohu, overseeing the firm’s research and development efforts. Prior to joining Sohu, Mr. Wang worked at ChinaRen, previously the largest online Chinese alumni club, where he spearheaded the development of the first open promotion search engine platform in China. He joined Sohu in 2000 upon its acquisition of ChinaRen. He holds a bachelor’s degree in computer science and a master’s degree in engineering from Tsinghua University.

Paul Keung has served as our independent director since May 2012.  Mr. Paul Keung has served as the chief financial officer of Tian Ge Interactive Holding Limited, or Tian Ge, a live social video company listed on Hong Kong Stock Exchange, since April 2014. Prior to joining Tian Ge, Mr. Keung served as chief financial officer and senior vice president of business development at NYSE-listed Taomee Holdings Limited, or Taomee, from February 2011 to April 2014. Prior to joining Taomee, Mr. Keung was managing director at Oppenheimer Investments Asia from 2008 to 2011, where he oversaw the firm’s Asia research practice. Between 2000 and 2008, Mr. Keung was executive director of CIBC World Markets, where he was primarily responsible for coverage of the Internet and media sectors in the US and China. From 1998 to 2000, Mr. Keung served as chief information officer at Wyndham International, a global hospitality company. Between 1994 and 1998, he held various roles in investment banking and equity research at Deutsche Morgan Grenfell, PaineWebber Securities, and Salomon Brothers.  He holds a bachelor’s degree in hotel administration from Cornell University and a master’s degree in real estate from New York University.

Gaofei Wang has served as our independent director since October 2014.  Mr. Gaofei Wang has been the chief executive officer of Weibo Corporation, or Weibo, a NASDAQ-listed company, since February 2014 and a senior vice president of SINA Corporation, or SINA, also a NASDAQ-listed company, since May 2013. Mr. Wang has been actively involved in the product and business development of Weibo since its inception and was promoted to general manager of Weibo in December 2012. Mr. Wang joined SINA in August 2000 and worked in its product development department until early 2004 when he transferred to the SINA Mobile division. Mr. Wang served as general manager of SINA Mobile from November 2006 to November 2012. Mr. Wang holds a bachelor’s degree in computer science from Peking University and an Executive MBA from Guanghua School of Management of Peking University.

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Linguang Wu has served as our chief executive officer since December 2012 and was our co-chief executive officer from March 2012 to December 2012.  Mr. Wu was previously a vice president of Nasdaq-listed KongZhong Corporation, or KongZhong, a provider of digital entertainment services for consumers in China, where he served in various managerial roles from 2002 until 2011. Mr. Wu was a member of the founding team at KongZhong and held numerous management positions, overseeing technology, operations, billing and licensing for the mobile and online game divisions over a ten-year career at KongZhong.  Before joining KongZhong, Mr. Wu was a technology manager at Sohu.com from 2000 to 2002, where he was responsible for several key projects, including Sohu.com’s flash mail, alumni club and website security. Mr. Wu received his bachelor’s degree in electronic engineering from the University of Science and Technology of China in 1995.

Shang-Hsiu Koo has been our chief financial officer since December 2010.  Prior to joining us, Mr. Koo was an equity research analyst at Piper Jaffray from June 2010 to December 2010 and a vice president at CapitalVue from December 2008 to June 2010.  Prior to joining CapitalVue, Mr. Koo was a China online game and Internet media analyst at Oppenheimer & Co. from February 2008 to December 2008.  Mr. Koo was at Pacific Epoch from June 2004 to December 2007 where he was a partner from 2005 to 2006.  Mr. Koo received a master’s degree in economics from Boston University in 2004 and bachelor’s degrees in electrical engineering and economics from University of Illinois at Urbana-Champaign in 2003.

Hui Song joined us as our financial controller in July 2010 and became our vice president of finance and accounting in January 2011.  Mr. Song was promoted to senior vice president of finance and accounting in December 2011.  Prior to joining us, Mr. Song was an auditor at KPMG from August 2001 to June 2010, serving as an audit manager from 2007 to 2010.  Mr. Song received his bachelor’s degree in accounting from Capital University of Economics and Business in 2001.  He is a member of the American Institute of Certified Public Accountants, the Hong Kong Institute of Certified Public Accountants and the Chinese Institute of Certified Public Accountants, and a member of the Certified Internal Auditors.

B.Compensation

The aggregate cash compensation paid to our directors and executive officers was RMB3.7 million (US$0.6 million) and options to acquire an aggregate of 30,000 ordinary shares and 180,000 restricted shares were granted to our directors and executive officers in 2014.  No pension, retirement or similar benefits has been set aside or accrued for our executive officers or directors.  We have no service contracts with any of our directors providing for benefits upon termination of employment.

Our PRC companies are required under PRC law to make contributions equal to a certain percentage of each employee’s salary for his or her retirement benefit, medical insurance benefits, housing funds, unemployment and other statutory benefit.

Equity Compensation Plan

In April 2007, our board of directors and our shareholders adopted an equity compensation plan, or our Original 2007 Plan, to attract, motivate, reward and retain selected employees, consultants and other eligible persons, and hence to drive the success of our business.  We amended our Original 2007 Plan in December 2010 to increase the total number of ordinary shares reserved under our 2007 Plan from 2,960,606 ordinary shares to 5,233,920 ordinary shares.  We further amended our Original 2007 Plan in March 2011 and renamed it as 2007 Share Incentive Plan, or our 2007 Plan. In June 2012, we increased the total number of ordinary shares reserved under our 2007 Share Incentive Plan from 5,233,920 ordinary shares to 7,633,920 ordinary shares, and amended the 2007 Plan to allow the administrator of the 2007 Share Incentive Plan to have additional flexibility to re-price awards granted under this Plan, including the re-pricing of “underwater” share options, without shareholder approval.

Plan Administration.  Our board of directors or one or more committees appointed by our board administers our 2007 Plan.  The plan sets forth the provisions and the terms and conditions of our awards.

Types of Awards.  Our 2007 Plan describes the principal features of the following awards that may be granted under our 2007 Plan, including, among others:

·Options.  Options provide for the right to purchase our ordinary shares at a specified exercise price subject to vesting.

·Share Appreciation Rights.  A share appreciation right is a right to receive a payment, in cash or ordinary shares, equal to the excess of the fair market value of a specified number of our ordinary shares on the date the share appreciation right is exercised over the base price as set forth in the award document.

The plan administrator may determine to grant other types of awards, including share bonuses, restricted shares, performance shares, share units, phantom shares and dividend equivalents.

Eligibility.  We may grant awards to our employees, directors, consultants and advisers or those of any of our subsidiaries and affiliates or any other person that the plan administrator determines to be eligible.

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Term of the Awards.  The term of each option grant shall be stated in the award agreement, provided that the term shall not exceed ten years from the date of the grant.  The maximum term of a share appreciation right is ten years.

Vesting Schedule.  In general, the plan administrator determines the vesting schedule, which is set forth in the award agreement.

Transfer Restrictions.  Awards granted under our 2007 Plan may not be transferred in any manner by the award holder other than according to law and by the award agreement and may be exercised only by the award holder unless otherwise permitted by the committee administering our equity compensation plan.

Award Agreement.  Awards granted under our 2007 Plan are evidenced by an award agreement that sets forth the terms and conditions applicable to each of these awards, as determined by our board or the committee administering our equity compensation plan in its sole discretion.

Termination.  Without further action by our board of directors, our 2007 Plan will terminate in January 2021.  Our board of directors may amend, suspend, or terminate our 2007 Plan at any time; provided, however, that our board of directors must first seek the approval of the participants of our 2007 Plan if such amendment, suspension or termination would adversely affect the rights of participants.

The table below sets forth the option grants made to our directors and executive officers pursuant to the 2007 Plan as of December 31, 2014.

Name	Number of Ordinary Shares to be Issued Upon Exercise of Options(1)	Exercise Price per Ordinary Share (in US$)	Date of Grant	Date of Expiration
Yongqiang Qian	60,000	2.7803	July 12, 2012	July 11, 2018
Haiyan Gong	45,000	2.7803	July 12, 2012	July 11, 2018
JP Gan	75,000	3.2733	March 16, 2012	March 15, 2018
	60,000	2.7803	July 12, 2012	July 11, 2018
Jianzhang Liang	25,862	2.7803	July 27, 2011	May 10, 2017
	60,000	2.7803	July 12, 2012	July 11, 2018
Xiaochuan Wang	75,000	3.1833	May 1, 2012	April 30, 2018
	60,000	2.7803	July 12, 2012	July 11, 2018
Paul Keung	42,188	3.1833	May 1, 2012	April 30, 2018
	37,500	2.7803	July 12, 2012	July 11, 2018
Linguang Wu	202,500	3.2733	March 16, 2012	March 15, 2018
	150,000	2.6663	December 21, 2012	December 20, 2018
Shang-Hsiu Koo	45,388	2.7803	December 8, 2010	December 7, 2016
	91,500	2.4803	June 1, 2012	May 31, 2018
	30,000	2.6663	December 21, 2012	December 20, 2018
	15,000	3.7130	July 11, 2014	July 10, 2020
Hui Song	25,547	0.8096	July 1, 2010	June 30, 2016
	1,290	2.7803	July 13, 2011	July 12, 2017
	16,800	3.4033	December 21, 2011	December 20,2017
	52,125	2.4803	June 1, 2012	May 31, 2018
	16,875	2.6663	December 21, 2012	December 20, 2018
	15,000	3.7130	July 11, 2014	July 10, 2020
Other employees and nonemployees	1,573,880	0.5983-6.9933	September1, 2009 — July 11, 2014	August31, 2015 — July 10, 2020

(1)Every two American depositary shares represents three ordinary shares.

In July 2012, our compensation committee approved modification of the exercise price of certain outstanding employee share options. Certain share options, all of which had been previously issued pursuant to the 2007 Original Plan or the 2007 Share Incentive Plan, were cancelled and replaced with share options with a decreased number of underlying shares and a lower exercise price based on the closing price of the Company’s ADSs on the Nasdaq Global Select Market on July 12, 2012, which was US$3.23 per ordinary share. The modification of the exercise price is applicable equally to options vested and unvested and to options granted to our directors and executive officers under the 2007 Original Plan and the 2007 Share Incentive Plan. The total compensation cost associated with the modification of the exercise price was not material.

The repriced options had originally been issued with exercise prices ranging from US$5.00 to US$7.44 per ordinary share. As a result of the reduction in our ADS price, we believed that such share options would provide better incentives to our employees if they were re-priced.

In October 2014, our board of directors approved to amend all unexercised option awards granted to directors and employees. The exercise prices of share options granted at original exercise prices ranging from US$1.05 to US$7.44 per ordinary share were modified to decreased US$0.4467 per ordinary share. The modification of the exercise price is applicable equally to options vested and unvested and to options granted to our directors and executive officers under the 2007 Original Plan and the 2007 Plan. The incremental fair value before and after the modification was recognized as follows: (a) for vested options, the incremental share-based compensation expenses are recognized immediately; and (b) for non-vested options, the incremental share-based compensation expenses are recognized in the statement of comprehensive income over the remaining vesting period.

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The table below sets forth the restricted share awards made to our directors and executive officers pursuant to the 2007 Plan as of December 31, 2014.

Name	Number of Restricted Shares	Date of Grant	End of Vesting Period
Yongqiang Qian	22,500	July 17, 2014	July 16, 2020
Haiyan Gong	22,500	July 17, 2014	July 16, 2020
JP Gan	22,500	July 17, 2014	July 16, 2020
Jianzhang Liang	22,500	July 17, 2014	July 16, 2020
Xiaochuan Wang	22,500	July 17, 2014	July 16, 2020
Paul Keung	22,500	July 17, 2014	July 16, 2020
Linguang Wu	232,500	March 16, 2012	March 16, 2016
Shang-Hsiu Koo	11,538	December 21, 2012	December 21, 2016
	22,500	July 11, 2014	July 10, 2020
Hui Song	6,491	December 21, 2012	December 21, 2016
	22,500	July 11, 2014	July 10, 2020
Other employees and nonemployees	349,578	March 16, 2012 — July 11, 2014	March 15, 2018 — July 10, 2020

The restricted shares began to vest during the year ending December 31, 2013. For the year ended December 31, 2014, we recorded share-based compensation expenses of RMB4.1 million (US$0.7 million) related to the restricted shares using the graded-vesting method. As of December 31, 2014, unrecognized compensation expenses relating to the non-vested restricted shares amounted to RMB7.4 million (US$1.2 million). These expenses are expected to be recognized over a weighted average period of 1.03 years.

C.Board Practices

Board of Directors

We are managed by our board of directors.  Our second amended and restated articles of association provides that there should be a board of directors consisting of not more than ten directors.  Currently we intend to have six or seven directors.  A director may be removed by special resolution of the shareholders.  There are no membership share ownership qualifications for directors unless and until fixed by us in a general meeting.  The compensation committee of our board will determine the remuneration to be paid to the directors.

Any director may at any time summon a meeting of the directors.

A meeting of our board of directors shall be competent to make lawful and binding decisions if a majority of the directors then in office are present or represented.  At any meeting of our directors, each director, be it by such director’s presence or by such director’s alternate, is entitled to one vote.

Board Committees

Our board of directors has established an audit committee and a compensation committee.

Audit Committee.  Our audit committee consists of Messrs. Paul Keung, Xiaochuan Wang and Gaofei Wang.  Mr. Paul Keung is the chairman of our audit committee.  Our board of directors has determined that each of Messrs. Paul Keung, Xiaochuan Wang and Gaofei Wang satisfy the “independence” requirements of Rule 5605 of the Nasdaq Listing Rules and meet the criteria for independence set forth in Section 10A(m)(3)(B)(i) of the Securities Exchange Act of 1934, or the Exchange Act.  In addition, our board of directors has determined that Mr. Paul Keung qualifies as an audit committee financial expert under the applicable SEC rules and as a financially sophisticated audit committee member under Rule 5605(c)(2)(A) of the Nasdaq Listing Rules.

Our audit committee will be responsible for, among other things:

·appointing independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

·reviewing with the independent auditors any audit problems or difficulties and management’s response;

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·reviewing and approving all proposed related-party transactions;

·discussing the annual audited financial statements with management and the independent auditors, major issues regarding accounting principles and financial statement presentations;

·reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

·discussing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments;

·reviewing with management and the independent auditors the effect of regulatory and accounting initiatives and actions; and

·such other matters that are specifically delegated to our audit committee by our board of directors from time to time.

Compensation Committee.  Our compensation committee consists of Messrs.  JP Gan and Xiaochuan Wang.  Mr. Gan is the chairman of our compensation committee.  Messrs.  JP Gan and Xiaochuan Wang satisfy the “independence” requirements of Rule 5605 of the Nasdaq Listing Rules.  Our compensation committee will assist the board of directors in reviewing and approving the compensation structure of our directors and executive officers, including all forms of compensation to be provided to our directors and executive officers.

Our compensation committee will be responsible for:

·reviewing and approving recommendations to our board of directors for approving the compensation for our executives;

·determining and reviewing bonuses for our officers and other employees;

·determining and reviewing stock-based compensation for our directors, officers, employees and consultants;

·reviewing and recommending to our board of directors compensation of our non-employee directors;

·administering our equity incentive plans in accordance with the terms thereof; and

·such other matters that are specifically delegated to the compensation committee by our board of directors from time to time.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Messrs. JP Gan and Paul Keung.  Mr. Gan is the chairman of our nominating and corporate governance committee.  Messrs. JP Gan and Paul Keung satisfy the “independence” requirements of Rule 5605 of the Nasdaq Listing Rules.  The nominating and corporate governance committee will assist our board of directors in identifying individuals qualified to become our directors and in determining the composition of the board and its committees.

The nominating and corporate governance committee will be responsible for, among other things:

·selecting and recommending the board nominees for election by the shareholders or appointment by our board of directors;

·reviewing annually with our board of directors its current composition in light of the characteristics of independence, knowledge, skills, experience and diversity;

·making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and

·advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken.

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Duties of Directors

Under Cayman Islands law, our directors have a common law duty of loyalty to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly.  Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances.  In fulfilling their duty of care to us, our directors must ensure compliance with our second amended and restated memorandum and articles of association.  Our second amended and restated memorandum and articles of association provides that a director may vote with respect to any contract or transaction in which he or she is interested, whether directly or indirectly interested, provided that the nature of the interest is disclosed prior to its consideration and any vote on such contract or transaction and that a general notice given to our board of directors by any director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed to be sufficient declaration of interest by that director.  We have the right to seek damages if a duty owed by our directors is breached.

The functions and powers of our board of directors include, among others:

·convening shareholders’ meetings and reporting its work to shareholders at such meetings;

·implementing shareholders’ resolutions;

·determining our business plans and investment proposals;

·formulating our profit distribution plans and loss recovery plans;

·determining our debt and finance policies and proposals for the increase or decrease in our registered capital and the issuance of debentures;

·formulating our major acquisition and disposition plans, and plans for merger, division or dissolution;

·proposing amendments to our second amended and restated memorandum and articles of association; and

·exercising any other powers conferred by the shareholders’ meetings or under our second amended and restated memorandum and articles of association.

Terms of Directors and Executive Officers

Each of our directors holds office until removed from office by a special resolution or otherwise vacated in accordance with our second amended and restated memorandum and articles of association.  All of our executive officers are appointed by and serve at the discretion of our board of directors.

Qualification

There is no shareholding qualification for directors.

Employment Agreements

We have entered into employment agreements with each of our executive officers. We may terminate an executive officer’s employment for cause at any time for certain acts of the officer, including, but not limited to, material violation of our policies, failure to perform agreed duties or embezzlement that cause material damage to us, or a conviction of a crime. We can also terminate, with 30-day notice or with payment equivalent to a month’s salary, under certain circumstances. An executive officer may terminate his or her employment at any time by 30-day prior written notice.

Confidentiality and Non-Competition Agreement

We have entered into confidentiality and non-competition agreements with our executive officers. Under these agreements, our executive officers have agreed not to engage or participate in any business activities that compete with us for two years after the termination of his/her employment. They have further agreed not to solicit any of our employees or customers, not to use or disseminate any confidential information concerning us and to assign to us the intellectual property rights in work generated by them as a result of performing their duties or using our resources during their employment with us.

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D.Employees

We had a total of 557 and 697 full-time employees as of December 31, 2013 and 2014, respectively.  The following table sets forth the number of our employees by function as of December 31, 2014.

	Number of
	Employees
Member/customer service	95
Sales	253
Marketing	44
General and administration	69
Technical support	236
Total	697

As required by PRC regulations, we participate in various employee benefit plans that are organized by municipal and provincial governments, including housing, pension, medical and unemployment benefit plans.  We are required under PRC law to make contributions to the employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time.  The total amount of contributions we made to employee benefit plans in 2012, 2013 and 2014 was RMB14.0 million, RMB17.6 million and RMB20.6 million (US$3.3 million), respectively.

We enter into a standard annual employment contract with most of our officers, managers and employees.  These contracts typically include a non-competition provision effective during their employment with us.

We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes.

E.Share Ownership

The following table sets forth information known to us with respect to the beneficial ownership of our ordinary shares as of April 15, 2015, taking into account the number of ordinary shares underlying our outstanding options, by:

·each of our directors and executive officers; and

·each person who is known to us to be the beneficial owner of more than 5.0% of our ordinary shares.

	Ordinary Shares Beneficially Owned
	Number (1)	Percent (1)
Directors and Executive Officers:
Yongqiang Qian (2)	10,655,522	21.3	%
JP Gan (3)	6,587,756	13.2	%
Linguang Wu (4)	631,392	1.3	%
Xiaochuan Wang	*	*	%
Paul Keung	*	*	%
Gaofei Wang	*	*	%
Shang-Hsiu Koo	*	*	%
Hui Song	*	*	%
Directors and Executive Officers Combined	18,230,518	35.8	%
Principal Shareholders
Fame Gain Investments Limited (5)	10,426,711	20.9	%
Vast Profit Holdings Limited (6)	9,808,889	19.6	%
Funds affiliated with Qiming Venture Partners, L.P. (7)	6,572,756	13.1	%

* Beneficially owns less than 1% of our ordinary shares.

(1)Beneficial ownership is determined in accordance with the rules of the SEC.

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(2)Includes (i) 8,926,711 ordinary shares held by Fame Gain Investments Limited, a limited liability company organized under the laws of the British Virgin Islands, or Fame Gain; (ii) 1,000,000 restricted American depositary shares held by Fame Gain representing 1,500,000 ordinary shares; (iii) 125,041 American depositary shares representing 187,561 ordinary shares held by Mr. Qian and (iv) 41,250 ordinary shares underlying share options held by Mr. Qian which are currently or exercisable within 60 days of April 15, 2015. Fame Gain Investments Limited is 100% owned by Mr. Qian. The registered address for Fame Gain Investments Limited is P.O. Box 173, Kingston Chambers, Road Town, Tortola, British Virgin Islands. The business address of Mr. Qian is 15/F, Anhua Development Building, No. 35 Anding Road, Chaoyang District, Beijing, the People’s Republic of China.

(3)Includes (i) 6,379,678 ordinary shares held by Qiming Venture Partners, L.P., (ii) 95,578 ordinary shares held by Qiming Managing Directors Fund, L.P. (iii) 97,500 ordinary shares underlying share options held by Mr. Gan which are currently exercisable or exercisable within 60 days of April 15, 2015 and (iv) 15,000 ordinary shares held by Mr. Gan. The general partner of Qiming Venture Partners, L.P. is Qiming GP, L.P., a Cayman Islands exempted limited partnership. The general partner of both Qiming Managing Directors Fund, L.P. and Qiming GP, L.P. is Qiming Corporate GP, Ltd., a Cayman Islands limited company. See also note (6) to this table below. Mr. Gan is a managing director of and participates on the investment committee of Qiming Corporate GP, Ltd. Mr. Gan disclaims beneficial ownership of the ordinary shares owned by Qiming Venture Partners, L.P. and Qiming Managing Directors Fund, L.P. and the ordinary shares underlying the share options. The business address for Mr. Gan is 11400 SE Sixth Street, Suite 100 Bellevue, Washington 98004, USA.

(4)           Includes (i) 228,267 ordinary shares held by Mr. Wu and (ii) 403,125 ordinary shares underlying share options held by Mr. Wu which are currently exercisable or exercisable within 60 days of April 15, 2015.  The business address for Mr. Wu is 15/F, Anhua Development Building, No. 35 Anding Road, Chaoyang District, Beijing, the People’s Republic of China.

(5)Includes (i) 8,926,711 ordinary shares held by Fame Gain and (ii) 1,000,000 restricted American depositary shares held by Fame Gain representing 1,500,000 ordinary shares.

(6)Includes 9,808,889 ordinary shares held by Vast Profit.  Vast Profit acquired 8,003,763 ordinary shares from Aprilsky and 1,805,126 ordinary shares from Maysky International Limited.  Based on information provided by Vast Profit in a Schedule 13D filed with the SEC on March 3, 2015, Vast Profit is a company incorporated under the laws of the Cayman Islands and Mr. Sun Guodong is the sole shareholder and director of Vast Profit and the business address of each of Vast Profit and Mr. Sun is Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

(7)Includes (i) 6,379,678 ordinary shares held by Qiming Venture Partners, L.P., (ii) 95,578 ordinary shares held by Qiming Managing Directors Fund, L.P. and (iii) 97,500 ordinary shares underlying share options held by JP Gan which are currently exercisable or exercisable within 60 days of April 15, 2015.  Qiming Venture Partners, L.P. and Qiming Managing Directors Fund, L.P. are collectively referred to as the Qiming Funds. The general partner of Qiming Venture Partners, L.P. is Qiming GP, L.P., a Cayman Islands exempted limited partnership. The general partner of both Qiming Managing Directors Fund, L.P. and Qiming GP, L.P. is Qiming Corporate GP, Ltd., a Cayman Islands limited company. Voting and investment power of the shares held by the Qiming Funds is exercised by the investment committee of Qiming Corporate GP, Ltd., which consists of Duane Kuang, Gary Rieschel, JP Gan and Robert Headley, each of whom disclaims beneficial ownership of the ordinary shares owned by the Qiming Funds except to the extent of his respective pecuniary interest therein. The registered address of the Qiming Funds, Qiming GP, L.P. and Qiming Corporate GP, Ltd. is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

To our knowledge, we had a total of five record holders in the United States. Citibank, N.A., as the depositary of our ADS facility, holds approximately 42.7% of our total outstanding ordinary shares. The number of beneficial owners of our ADSs in the United States is likely much larger than the number of record holders of our ordinary shares in the United States.

None of our existing shareholders have voting rights that differ from the voting rights of other shareholders after the closing of our initial public offering.

Item 7.Major Shareholders and Related Party Transactions.

A.Major Shareholders

For the details of our major shareholders, please refer to Item 6.  “Directors, Senior Management and Employees — Share Ownership.”

Going private transaction

We received a preliminary non-binding proposal letter, dated March 3, 2015, from Vast Profit that proposes a “going-private” transaction involving the acquisition of all of our outstanding ordinary shares not already owned by Vast Profit at a price per share of US$3.58, or US$5.37 per American depositary share, in cash.  Our board of directors has formed a special committee of independent directors to consider the proposed “going-private” transaction.

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B.Related Party Transactions Overview

Transactions Related to Our Corporate Structure

See “Item 4. Information on the Company — C. Organizational Structure” for a description of contractual arrangements related to our corporate structure.

Shareholders’ Agreement

In connection with our Series A financing transaction in April 2007, Harper, its shareholders and preferred shareholders entered into a shareholders’ agreement dated as of May 14, 2007. As a result of the Share Swap in January 2011, the shareholders’ agreement was terminated, and a new shareholders’ agreement dated as of January 26, 2011, or Shareholders’ Agreement, was entered into between us and the existing shareholders of Jiayuan. Pursuant to the Shareholders’ Agreement, we have granted certain registration rights to holders of our registrable securities, which include our ordinary shares issued or issuable upon conversion of our preferred shares. Set forth below is a description of the registration rights granted under the agreement.

Demand Registration Rights.  Holders of the registrable securities then outstanding have the right to demand that we file a registration statement for at least 10% of the registrable securities then held by such holders. We, however, are not obliged to effect a demand registration if we have already effected three registrations and such registrations have been declared or ordered effective.

Form F-3 or Form S-3 Registration Rights.  Holders of at least 25% of our registrable securities then outstanding have the right to request that we file a registration statement under Form F-3 or Form S-3 or a similar form. We are not obliged to effect any such registration (i) if Form S-3 is not then available for such offering by the holders of our registrable securities; (ii) if the holders of registrable securities, together with the holders of any other securities we issued that are entitled to inclusion in such registration, propose to sell registrable securities and such other securities at an aggregate price to the public of less than US$5,000,000; (iii) if we provide the requesting holders a certificate signed by our chief executive officer stating that in the good faith judgment of the board of directors that filing of a registration statement will be detrimental to us and our shareholders (in which case we may defer the filing of the Form S-3, Form F-3 (or a similar form) registration statement for a period of not more than 90 days), but we cannot exercise this deferral right more than once in any 12-month period on a registration request initiated by a same group of initiating holders. We may not register any securities for the account of ourselves or any other shareholder during such 90 day period, subject to certain exceptions, (i) if we have, within the twelve month period preceding the date of such request, already effected two registrations on Form S-3 or Form F-3 (or a similar form) for the holders; (ii) in any particular jurisdiction in which we would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or (iii) during the period ending 180 days after the effective date of a piggybank registration.

Piggyback Registration Rights.  If we propose to register any of our shares or other securities under the Securities Act in connection with the public offering of such securities solely for cash, subject to certain exceptions, then we must offer holders of registrable securities an opportunity to include in this registration all or any part of their registrable securities. The underwriters of any underwritten offering may in good faith allocate the shares to be included in the registration statement first to us, second to each of the requesting holders of registrable securities on a pro rata basis, and third to holders of other shares of us as long as (i) the number of registrable securities included in any such registration is not below 25% of the aggregate number of shares of registrable securities for which inclusion has been requested, and (ii) all shares that are not registrable securities and are held by any other person are first excluded.

Expenses of Registration.  We will pay all registration expenses (other than underwriters’ discounts or commissions) relating to any demand, Form F-3 or S-3, or piggyback registration as described above.

Employment Agreements

See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management” for a description of the employment agreements we have entered into with our senior executive officers.

Stock Option Grants

See “Item 6. Directors, Senior Management and Employees — Compensation of directors and executive officers.”

Consultant Agreement with Ms. Haiyan Gong

We entered into a consultant agreement with Ms. Haiyan Gong, our founder, in December 2012.  Under this agreement, Ms. Gong agrees to provide, among other things, certain consultant services for a term of three years and will receive a monthly fee of RMB49,000 approximately.

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C.Interests of Experts and Counsel

Not applicable.

Item 8.Financial Information.

A.Consolidated Statements and Other Financial Information

Please see our consolidated financial statements which are filed as part of this annual report.

Legal proceedings

We may be subject to legal proceedings, investigations and claims relating to the conduct of our business from time to time.  We may also initiate legal proceedings in order to protect our contractual and property rights.  We are not currently a party to, nor are we aware of, any legal proceeding, investigation or claim which, in the opinion of our management, is likely to have a material adverse effect on our business, financial condition or results of operations.

Dividend policy

We paid a cash dividend in the amount of RMB44.4 million (US$7.3 million) in March 2014 and a special cash dividend in the amount of RMB121.5 million (US$19.8 million) in October 2014. Our board of directors approved an annual dividend policy in 2013 under which we expect to pay annual dividends with an aggregate amount of up to 60% of the our non-GAAP annual net income. We currently intend to retain 40% of our subsidiaries’ available funds and any future earnings to finance our business and to fund the growth and expansion of our business. Our board of directors has complete discretion as to whether to distribute dividends.

We are a holding company incorporated in the Cayman Islands.  We rely on dividends from our subsidiaries in China.  Current PRC regulations permit our subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.  In addition, our subsidiaries in China are required to set aside each year a certain amount of their accumulated after-tax profits, if any, to fund certain statutory reserves.  These reserves may not be distributed as cash dividends.  Further, if our subsidiaries in China incur debt on their own behalf, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.  For a detailed discussion, see “Item 3. Key Information — D. Risk Factors—Risks Relating to Regulation of Our Business and to Our Structure—Our holding company structure may restrict our ability to receive dividends from, or transfer funds to, our PRC subsidiaries, which could restrict our ability to act in response to changing market conditions and reallocate funds among our Chinese entities in a timely manner.” Limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely affect our ability to grow, make investments or acquisitions, pay dividends, and otherwise fund and conduct our businesses.  Any future determination to pay dividends, if any, will be made at the discretion of our board of directors and will be based upon our future operations and earnings, capital requirements and surplus, general financial condition, shareholders’ interests, contractual restrictions and other factors our board of directors may deem relevant.

Holders of our ADSs will be entitled to receive dividends, if any, subject to the terms of the deposit agreement, to the same extent as the holders of our ordinary shares.  Cash dividends will be paid to the depositary in U.S. dollars, which will distribute them to the holders of ADSs according to the terms of the deposit agreement.  Other distributions, if any, will be paid by the depositary to the holders of ADSs in any means it deems legal, fair and practical.

B.Significant Changes

We have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

Item 9.The Offering and Listing.

A.Offering and Listing Details

Our ADSs, every two ADSs representing three ordinary shares, have been listed on the NASDAQ Global Select Market since May 11, 2011. Our ADSs are traded under the symbol “DATE.”

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The following table provides the high and low trading prices for our ADSs on the NASDAQ Global Select Market for the periods shown.

	Trading Price
	High	Low
	US$	US$
Annual Highs and Lows
2011 (from May 11, 2011)	16.12	5.50
2012	7.95	3.60
2013	9.48	4.64
2014	8.85	4.35
Quarterly Highs and Lows
2013
First Quarter	6.05	4.64
Second Quarter	5.75	4.88
Third Quarter	9.48	5.22
Fourth Quarter	7.78	5.61
2014
First Quarter	8.85	5.85
Second Quarter	6.99	5.10
Third Quarter	6.90	5.26
Fourth Quarter	6.63	4.35
Monthly Highs and Lows
2014
October	6.63	5.01
November	5.79	4.81
December	5.08	4.35
2015
January	5.00	4.18
February	5.15	4.45
March	5.29	4.64
April (through April 15, 2015)	5.55	5.05

B.Plan of Distribution

Not applicable.

C.Markets

Our ADSs, every two ADSs representing three ordinary shares have been listed on the NASDAQ Global Select Market since May 11, 2011 under the symbol “DATE.”

D.Selling Shareholders

Not applicable.

E.Dilution

Not applicable.

F.Expenses of the Issue

Not applicable.

Item 10.Additional Information.

A.Share Capital

Not applicable.

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B.Memorandum and Articles of Association

We incorporate by reference into this annual report the description of our second amended and restated memorandum and articles of association contained in “Description of Share Capital” of our F-1 registration statement (File No. 333-173619) originally filed with the Securities and Exchange Commission on April 20, 2011, as amended.

C.Material Contracts

We have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 4. Information on the Company” or elsewhere in this annual report.

D.Exchange Control

See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulation of Foreign Currency Exchange and Dividend Distribution.”

E.Taxation

Cayman Islands Taxation

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our company levied by the government of the Cayman Islands save certain stamp duties which may be applicable, from time to time, on certain instruments executed in or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not a party to any double tax treaties that are applicable to any payments made to or by our company.

There is no exchange control legislation under Cayman Islands law and accordingly there are no exchange control regulations imposed under Cayman Islands law.

People’s Republic of China Taxation

The EIT Law provides that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” of China.  Under the implementation regulations for the EIT Law issued by the PRC State Council, “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise.  On April 22 2009, the SAT released the Notice Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies , or SAT Circular 82, which sets out the standards and procedures for recognizing the location of the “de facto management bodies” of an enterprise registered outside of the PRC and funded by Chinese enterprises as controlling investors, or a Chinese Funded Enterprise.  Although SAT Circular 82 only applies to offshore enterprises controlled by PRC enterprises, or the Chinese Funded Enterprise, not those controlled by PRC individuals like us, the determining criteria set forth in the SAT Circular 82 may reflect the SAT’s general position on how the “de facto management body” test may be applied in determining the tax resident status of offshore enterprises.  Under SAT Circular 82, a Chinese Funded Enterprise shall be considered a resident enterprise if all of the following applies: (i) a Chinese Funded Enterprise’s major management department and personnel who are responsible for carrying out daily operations are located in the PRC; (ii) the department or the personnel who have the right to decide or approve the Chinese Funded Enterprise’s financial and human resource matters are located in the PRC; (iii) the major assets, account book, company seal and meeting minutes of the Chinese Funded Enterprise are located or stored in the PRC; and (iv) the directors or management personnel holding no less than 50% voting rights of the Chinese Funded Enterprise habitually reside in the PRC.

We do not believe that any of our offshore entities meets all of the conditions above.  Each of Jiayuan, Harper and Jiayuan Hong Kong is a company incorporated outside the PRC.  As holding companies, these three entities’ key assets and records, including the resolutions of their respective board of directors and the resolutions of their respective shareholders, are located and maintained outside the PRC.  Due to the lack of clear guidance on the criteria pursuant to which the PRC tax authorities will determine our tax residency under the EIT Law, see “Item 3. Key Information — D. Risk Factors—Risks Relating to Our Industry—We may be classified as a “resident enterprise” for PRC enterprise income tax purposes, which could result in our global income becoming subject to 25% PRC enterprise income tax,” it remains unclear whether the PRC tax authorities will treat us as a PRC resident enterprise.  Therefore, we believe that none of these three entities should be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in the SAT Circular 82 were deemed applicable to us.

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Under the EIT Law and implementation regulations issued by the State Council, PRC withholding tax at the rate of 10% is applicable to dividends payable to investors that are “non-resident enterprises,” which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends have their sources within the PRC, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement.  We are a Cayman Islands holding company and substantially all of our income may come from the dividends we receive from our PRC subsidiaries through Jiayuan Hong Kong.  Under the Arrangement between the Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion, which became effective on January 1, 2007, income tax on dividends payable to a company resident in Hong Kong that holds more than a 25% equity interest in a PRC resident enterprise may be reduced to a rate of 5%.  However, it is uncertain that we will be able to enjoy such preferential withholding tax treatment.  According to the Circular of the State Administration of Taxation on Printing and Issuing the Administrative Measures for Non-resident Individuals and Enterprises to Enjoy the Treatment Under Taxation Treaties, which became effective on 1 October 2009, the 5% tax rate does not automatically apply and approvals from competent local tax authorities are required before an enterprise can enjoy the relevant tax treatments relating to dividends under relevant taxation treaties.  Furthermore, according to the Notice on Certain Issues with respect to the Enforcement of Dividend Provisions in Tax Treaties issued by the State Administration of Taxation in February 2009, if the main purpose of an offshore arrangement is to obtain a preferential tax treatment, the PRC tax authorities have the discretion to adjust the preferential tax rate enjoyed by the relevant offshore entity.  However, as the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, notwithstanding the foregoing, we may be deemed to be a PRC resident enterprise under the EIT Law.  If we are deemed to be a PRC resident enterprise, we will be subject to PRC enterprise income tax at the rate of 25% on our global income and, unless otherwise provided under the applicable double tax treaties between China and governments of other jurisdictions, our non-resident enterprise shareholders, including the holders of our ADSs, shall be subject to a 10% withholding tax in connection with any dividends received from us and any gains received from disposition of our ordinary shares / ADSs and our non-resident individual shareholders, including the holders of our ADSs, shall be subject to a 20% withholding tax in connection with any gains derived from disposition of our ordinary shares / ADSs and it is unclear if there will be any future guidance extending the withholding tax to dividends we pay to our non-PRC individual shareholders.  In that case, however, dividend income we receive from our PRC subsidiaries may be exempt from PRC enterprise income tax because the EIT Law and its implementation rules generally provide that dividends received from a PRC resident enterprise from its directly invested entity that is also a PRC resident enterprise is exempt from enterprise income tax.  However, as there is still uncertainty as to how the EIT Law and its implementation rules will be interpreted and implemented, we cannot assure you that we are eligible for such PRC enterprise income tax exemptions or reductions.

If we are deemed to be a PRC resident enterprise and our non-resident shareholders (including our ADS holders) are subject to PRC tax as described above, we shall be the withholding agent in respect of the enterprise income tax on payments of dividends to such investors and the payer of the transfer price shall be the withholding agent in respect of the income tax on the disposition gains.  The withholding agent must obtain a tax withholding registration and withhold the income tax from each payment made to a non-resident shareholder and file a report to the competent tax authorities.  Where the withholding agent fails or is unable to perform its withholding obligation, the non-resident shareholder must pay the tax payment due to the applicable tax authorities within seven days after the payment is made or due.  In the event that we or our non-resident shareholders (including our ADS holders) fail to comply with the above procedures, we or our non-resident shareholders (including our ADS holders) may be ordered to rectify the noncompliance or be subject to a fine of no more than RMB10,000.  Failure by us to withhold the income tax fully and timely may result in late payment penalties and a fine of 50% to three times of the unpaid tax and failure by our ADS holders to pay the tax fully and timely may result in late payment penalties and a fine of 50% to five times of the unpaid tax.

United States Federal Income Tax Consequences

The following discussion describes the material United States federal income tax consequences of the ownership and disposition of our ordinary shares and ADSs as of the date hereof.  The discussion is applicable only to U.S. Holders (as defined below) who hold our ordinary shares or ADSs as “capital assets,” as defined in Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”).  The discussion below is based upon the provisions of the Code and regulations, administrative rulings and judicial decisions thereunder, all as of the date hereof, which are subject to differing interpretations or change (possibly with retroactive effect) so as to result in United States federal income tax consequences different from those discussed below.  We can provide no assurance that the tax considerations contained in this summary will not be challenged by the Internal Revenue Service or will be sustained by a court if so challenged.

As used herein, the term “U.S. Holder” means a beneficial owner of an ordinary share or ADS that is for United States federal income tax purposes:

·      an individual citizen or resident of the United States;

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·      a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

·      an estate the income of which is subject to United States federal income taxation regardless of its source; or

·      a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

If a partnership (or other entity taxable as a partnership for United States federal income tax purposes) holds our ordinary shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level.  If you are a partnership or a partner in such partnership that holds our ordinary shares or ADSs, you should consult your tax advisors.

This discussion does not address state, local, or foreign tax considerations, the Medicare Contribution tax on net investment income, or any estate or gift tax consequences, and does not address tax considerations applicable to you if you are subject to special treatment under the United States federal income tax laws, including if you are:

·     a dealer in securities or currencies;

·     a financial institution;

·     a regulated investment company;

·     a real estate investment trust;

·     an insurance company;

·     a tax-exempt organization;

·     a person holding our ordinary shares or ADSs as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle;

·     a trader in securities that has elected the mark-to-market method of accounting;

·     a person liable for alternative minimum tax;

·     a person who owns or is deemed to own 10% or more of our voting stock;

·     a partnership or other pass-through entity for United States federal income tax purposes;

·     a United States expatriate and certain former citizens or long-term residents of the United States; or

·     a person whose “functional currency” is not the United States dollar.

The United States Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security (for example, pre-releasing ADSs to persons that do not have the beneficial ownership of the securities underlying the ADSs).  Accordingly, the creditability of any PRC taxes and the availability of the reduced tax rate for any dividends received by certain non-corporate U.S. Holders, including individual U.S. Holders, could be affected by actions taken by intermediaries in the chain of ownership between the holders of ADSs and our company if, as a result of such actions, the holders of ADSs are not properly treated as beneficial owners of underlying ordinary shares.

YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO YOU IN LIGHT OF YOUR PARTICULAR SITUATION AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.

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ADSs

If you hold ADSs, you generally will be treated as the owner of the underlying ordinary shares that are represented by such ADSs for United States federal income tax purposes.  Accordingly, deposits or withdrawals of ordinary shares for ADSs will not be subject to United States federal income tax.

Taxation of Dividends

Subject to the discussion under “—Passive Foreign Investment Company” below, the gross amount of any distributions on the ADSs or ordinary shares (including the amount of any taxes withheld therefrom) will be included in your gross income as ordinary dividend income on the day actually or constructively received by you, in the case of the ordinary shares, or by the depositary, in the case of ADSs.  Such dividends will not be eligible for the dividends received deduction allowed to corporations under the Code.

With respect to certain non-corporate U.S. Holders, including individual U.S. Holders, dividends may be subject to reduced rates of taxation provided that (a) the ordinary shares (or ADSs backed by such shares) with respect to which the dividends are paid are readily tradable on an established securities market in the United States or, in the event we are deemed to be a PRC “resident enterprise” under the PRC tax law, we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “US-PRC Treaty”), (b) we are not a passive foreign investment company (as discussed below under “—Passive Foreign Investment Company”) for either the taxable year in which the dividend is paid or the preceding taxable year, and (c) certain holding period requirements are met. For purposes of clause (a) above, United States Treasury Department guidance indicates that our ADSs, but not our ordinary shares, are traded on an established securities market in the United States.  There can be no assurance that our ADSs will be considered readily tradable on an established securities market.  You should consult your own tax advisors regarding the application of these rules given your particular circumstances.

Subject to certain conditions and limitations, PRC withholding taxes on dividends, if any, may be treated as foreign taxes eligible for credit against your United States federal income tax liability.  For purposes of calculating the foreign tax credit, dividends paid to you with respect to our ordinary shares or ADSs will be treated as income from sources outside the United States and will generally constitute passive category income.  The rules governing eligibility for the benefits of the income tax treaty and the foreign tax credit are complex.  Accordingly, you are urged to consult your tax advisors regarding the application of these rules in light of your particular circumstances.

Taxation of Dispositions

Subject to the discussion under “—Passive Foreign Investment Company” below, you will recognize taxable gain or loss on any sale, exchange or other disposition of our ADSs or ordinary shares in an amount equal to the difference between the amount realized for the ADSs or ordinary shares and your tax basis in the ADSs or ordinary shares.  Such gain or loss will generally be capital gain or loss.  Capital gains are generally subject to United States federal income tax at the same rate as ordinary income, except that non-corporate U.S. Holders who have held their ADSs or ordinary shares for more than one year may be eligible for reduced rates of taxation.  The deductibility of capital losses is subject to limitations.

Any gain or loss recognized by you will generally be treated as United States source gain or loss.  Consequently, you may not be able to use the foreign tax credit arising from any PRC tax imposed on the disposition of our ADSs or ordinary shares unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from foreign sources.  However, if we are treated as a “resident enterprise” for PRC tax purposes, we may be eligible for the benefits of the US-PRC Treaty.  In such event, if PRC tax were to be imposed on any gain from the disposition of the ADSs or ordinary shares, a U.S. Holder that is eligible for the benefits of the US-PRC Treaty may treat the gain as PRC source income for foreign tax credit purposes.  You are urged to consult your tax advisors regarding the creditability of any such PRC tax under your particular circumstances.

Passive Foreign Investment Company

Based upon the composition of our income and assets and valuation of our assets, including goodwill, we do not believe we were a “passive foreign investment company,” or PFIC, for United States federal income tax purposes for our taxable year ended December 31, 2014.  In general, we will be a PFIC for any taxable year in which:

·     at least 75% of our gross income for such year is passive income, or

·     at least 50% of the value (determined based on a quarterly average) of our assets during such year is attributable to assets that produce or are held for the production of passive income.

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For this purpose, passive income generally includes dividends, interest, royalties and rents (other than royalties and rents derived in the active conduct of a trade or business and not derived from a related person) and gains from the disposition of passive assets.  If we own, directly or indirectly, at least 25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of such corporation’s assets and receiving our proportionate share of such corporation’s income.  While it is not entirely clear how the contractual arrangements between us and our PRC operating companies and Jiayuan Shanghai Center will be treated for purposes of the PFIC rules, we believe that such contractual arrangements should be treated as ownership of stock.  However, if it is determined that such contractual arrangements should not be treated as ownership of stock for purposes of the PFIC rules, we would likely be treated as a PFIC.

The determination of whether we are a PFIC is made annually.  Accordingly, it is possible that we may become a PFIC in a future taxable year due to changes in our asset or income composition.  Because we have valued our goodwill based on the market value of our equity, a decrease in the price of our ADSs and ordinary shares may also result in our becoming a PFIC.  If we are a PFIC for any taxable year during which you hold our ADSs or ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which you hold our ADSs or ordinary shares, regardless of whether we actually continue to be a PFIC.

If we are a PFIC for any taxable year during which you hold our ADSs or ordinary shares, you will be subject to special tax rules with respect to any “excess distribution” received and any gain realized from a sale or other disposition, including a pledge, of ADSs or ordinary shares, unless you make a “mark-to-market” election as discussed below.  For this purpose, excess distributions are distributions received in a taxable year that are greater than 125% of the average annual distributions received in respect of your ADSs or ordinary shares during the shorter of the three preceding taxable years or your holding period for the ADSs or ordinary shares.  Under these special tax rules:

·the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares,

·the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

·the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale or other disposition of the ADSs or ordinary shares cannot be treated as capital, even if you hold the ADSs or ordinary shares as capital assets.

In addition, non-corporate U.S. Holders will not be eligible for reduced rates of taxation on any dividends described under “—Taxation of Dividends” above, if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.  Under recently enacted legislation, if you hold ADSs or ordinary shares in any year in which we are a PFIC, you are required to file an annual report containing such information as the United States Treasury may require.  If we are or become a PFIC, you should consult your tax advisors regarding any reporting requirements that may apply to you.

If we are a PFIC for any taxable year during which you hold our ADSs or ordinary shares and we own, directly or indirectly, stock in any other entities that are PFICs, you would be treated as owning a proportionate amount (by value) of such stock for purposes of the application of these rules.  You are urged to consult your tax advisors about the application of the PFIC rules to other entities in which we own stock.

In certain circumstances, you may avoid the PFIC tax consequences described above by making a valid mark-to-market election, provided the stock of a PFIC is regularly traded on a qualified exchange.  Under current law, the mark-to-market election may be available to holders of ADSs because the ADSs are listed on the Nasdaq Global Select Market, which constitutes a qualified exchange, although there can be no assurance that the ADSs will be “regularly traded” for purposes of the mark-to-market election.  It should also be noted that only the ADSs and not our ordinary shares are traded on the Nasdaq Global Select Market.  Consequently, if you are a holder of ordinary shares that are not represented by ADSs, you generally will not be eligible to make a mark-to-market election if we are or become a PFIC.  In addition, because a mark-to-market election cannot be made for equity interests in any lower-tier PFICs that we own, a U.S. Holder may continue to be subject to the PFIC rules with respect to its indirect interest in any investments held by us that are treated as an equity interest in a PFIC for United States federal income tax purposes.

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If you make an effective mark-to-market election for the first taxable year in which you hold (or are deemed to hold) our ADSs, you will include as ordinary income in each taxable year that we are a PFIC the excess of the fair market value of your ADSs at the end of your taxable year over your adjusted tax basis in the ADSs.  Moreover, you will be entitled to deduct as an ordinary loss each year the excess of your adjusted tax basis in the ADSs over their fair market value at the end of your taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election.  If you make an effective mark-to-market election, any gain you recognize upon the sale or other disposition of your ADSs will be treated as ordinary income, and any loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election.

Your adjusted tax basis in the ADSs will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules.  Any distributions that we make would generally be subject to the rules discussed above under “—Taxation of Dividends,” except that the lower rate applicable to qualified dividend income would not apply.  If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ADSs are no longer regularly traded on a qualified exchange or the Internal Revenue Service consents to the revocation of the election.  You are urged to consult your tax advisor about the availability of the mark-to-market election and whether making the election would be advisable in your particular circumstances.

In addition, if we are a PFIC, we currently do not intend to prepare or provide the information necessary to permit you to make a “qualifying electing fund” election under Section 1295 of the Code.

You are urged to consult your tax advisors concerning the United States federal income tax consequences of holding ADSs or ordinary shares if we are considered a PFIC in any taxable year.

Non-U.S. holders

A non-U.S. Holder generally will not be subject to U.S. federal income tax on dividends paid by us with respect to our ordinary shares or our ADSs unless the income is effectively connected with the non-U.S. Holder’s conduct of a trade or business in the United States (and, if an applicable income tax treaty so requires, attributable to a permanent establishment that is maintained in the United States).

A non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our ordinary shares or our ADSs unless such gain is effectively connected with the non-U.S. Holder’s conduct of a trade or business in the United States (and, if an applicable income tax treaty so requires, attributable to a permanent establishment that is maintained in the United States) or the non-U.S. Holder is a natural person who is present in the United States for 183 days or more and certain other conditions exist.

Dividends and gains that are effectively connected with a non-U.S. Holder’s conduct of a trade or business in the United States generally will be subject to tax in the same manner as they would be if the non-U.S. Holder were a U.S. Holder, except that the passive foreign investment company rules will not apply.  Effectively connected dividends and gains received by a corporate non-U.S. Holder may also be subject to an additional branch profits tax at a 30.0% rate or a lower tax treaty rate.

Information reporting and backup withholding

In general, information reporting requirements will apply to dividends in respect of our ordinary shares or our ADSs or the proceeds received on the sale, exchange or redemption of our ordinary shares or our ADSs paid within the United States (and in certain cases, outside the United States) to U.S. Holders other than certain exempt recipients, such as corporations, and backup withholding tax may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number or to report interest and dividends required to be shown on its U.S. federal income tax returns. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability provided that the appropriate returns are filed.

A Non-U.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status to the payor, under penalties of perjury, on the applicable IRS Form W-8BEN.

Additional Reporting Requirements

U.S. Holders who are individuals may be required to report information relating to an interest in certain foreign financial assets, including equity in foreign entities, if the aggregate value of all of these assets exceeds US$50,000.  Our ADSs and ordinary shares are expected to constitute foreign financial assets subject to these requirements.  Failure to comply with these reporting requirements may result in substantial penalties.  You should consult your tax advisors regarding the effect, if any, of these rules on the ownership and disposition of our ADS and ordinary shares.

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F.Dividends and Paying Agents

Not applicable.

G.Statement by Experts

Not applicable.

H.Documents on Display

We previously filed with the SEC our registration statement on Form F-1, as amended, and prospectus under the Securities Act of 1933, with respect to our ordinary shares represented by the ADSs. We also filed with the SEC a related registration statement on Form F-6 with respect to the ADSs.

We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. All documents filed by us with the SEC can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system.

As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We intend to furnish Citibank, N.A., the depositary of our ADSs, with all notices of shareholders’ meeting and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our written request, will mail to all record holders of ADSs the information contained in any notice of a shareholders’ meeting received by the depositary from us.

In accordance with Rule 5250(d) of the NASDAQ Listing Rules, we will post this annual report on Form 20-F on our website at http://ir.jiayuan.com/sec.cfm. In addition, we will provide hard copies of our annual report free of charge to shareholders and ADS holders upon request.

I.Subsidiary Information

For a listing of our subsidiaries, see “Item 4. Information on the Company—C. Organizational Structure” and Exhibit 8.1 “Significant Subsidiaries,” filed herewith.

Item 11.Quantitative and Qualitative Disclosures About Market Risk.

Our business activities are exposed to a variety of market risks, including credit risk, foreign currency risk, inflation risk and interest rate risk.

Credit Risk

Financial instruments that potentially subject us to significant concentration of credit risk primarily consist of cash and cash equivalents, short-term deposits, accounts receivable and term deposits.  As of December 31, 2012, 2013 and 2014, substantially all of our cash and cash equivalents and short-term deposits were held by banks located in the PRC that we believes are of high-credit ratings and quality. Accounts receivable are typically unsecured and are mainly derived from revenue collected by distribution and collections companies on our behalf in the PRC.  The risk with respect to accounts receivable is mitigated by credit evaluations that we perform on the distribution and collections companies and our ongoing monitoring of outstanding balances.

Foreign Currency Risk

Substantially all our revenues and expenses are denominated in Renminbi, with a portion in U.S. dollars.  Although in general, our exposure to foreign exchange risks should be limited, the value of your investment in our ADSs will be affected by the foreign exchange rate between U.S. dollars and Renminbi because the value of our business is effectively denominated in Renminbi, while the ADSs will be traded in U.S. dollars.  Such fluctuations will also affect us with respect to the translation of the net proceeds we receive from our initial public offering into Renminbi.  Furthermore, a decline in the value of the Renminbi could reduce the U.S. dollar equivalent of the value of the earnings from, and our investments in, our PRC companies.  Based on the amount of our U.S. dollar denominated cash and cash equivalents as of December 31, 2014, a 10% change in the exchange rates between the Renminbi and the U.S. dollar would result in an increase or decrease of RMB5.2 million (US$0.8 million) of our total amount of cash and cash equivalents.  To the extent we need to convert U.S. dollars we receive from our initial public offering into Renminbi for our operations or other uses within the PRC, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion.

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A majority of our operating transactions are denominated in RMB and a significant portion of our assets and liabilities is denominated in RMB, including some portion of the net proceeds we received from initial public offering which has been converted into RMB. RMB is not freely convertible into foreign currencies.  The value of the RMB is subject to changes in the central government policies and to international economic and political developments.  In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China, or PBOC. Our remittances in currencies other than RMB in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

Inflation Risk

In recent years, China has not experienced significant inflation, and therefore inflation has not had a significant effect on our business.  Although we have not in the past been materially affected by any such inflation since our inception, we can provide no assurance that we will not be affected in the future by higher rates of inflation in China.  For example, certain operating costs and expenses, such as personnel expenses, building leasing expenses, travel expenses and office operating expenses may increase as a result of higher inflation.  We are not able to hedge our exposures to higher inflation in China.  According to the National Bureau of Statistics in China, the change in the Consumer Price Index in China was 2.6%, 2.6% and 2.0% in 2012, 2013 and 2014, respectively.

Interest Rate Risk

Our exposure to the interest rate risk primarily relates to the interest income generated by excess cash invested in short-term deposits and term deposits.  Interest earning instruments carry a degree of interest rate risk.  We have not been exposed nor do we anticipate being exposed to material risks due to changes in market interest rates.  However, our future interest income may fall short of expectations due to changes in market interest rates.  Based on our interest earning instruments during the year ended December 31, 2014, a 10% change in the interest rates would result in an increase or decrease of RMB1.8 million (US$0.3 million) of our total amount of interest income for 2014.

Item 12.Description of Securities Other than Equity Securities.

A.  Debt Securities

Not applicable.

B.  Warrants and Rights

Not applicable.

C.  Other Securities

Not applicable.

D.  American Depositary Shares

Fees and Charges Payable by ADR Holders

ADS holders will be required to pay the following service fees to the depository:

Service	Fees
· Issuance of ADSs	Up to U.S. 5¢ per ADS issued
· Cancellation of ADSs	Up to U.S. 5¢ per ADS canceled
· Distribution of cash dividends or other cash distributions	Up to U.S. 5¢ per ADS held
· Distribution of ADSs pursuant to stock dividends, free stock distributions or exercise of rights	Up to U.S. 5¢ per ADS held
· Distribution of securities other than ADSs or rights to purchase additional ADSs	Up to U.S. 5¢ per ADS held
· Depositary Services	Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the Depositary
· Transfer of ADRs	U.S. $1.50 per certificate presented for transfer

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Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary bank and by the brokers (on behalf of their clients) delivering the ADSs to the depositary bank for cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary bank to the holders of record of ADSs as of the applicable ADS record date.

The Depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of distributions other than cash (i.e., stock dividend, rights), the depositary bank charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary bank sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via DTC), the depositary bank generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients’ ADSs in DTC accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary banks.

In the event of refusal to pay the depositary fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary. You will receive prior notice of such changes.

The depositary bank may reimburse us for certain expenses incurred by us in respect of the ADR program established pursuant to the deposit agreement, by making available a portion of the depositary fees charged in respect of the ADR program or otherwise, upon such terms and conditions as the company and the Depositary may agree from time to time.

Fees and Other Payments Made by the Depositary to Us

Our depositary has agreed to reimburse us for certain expenses we incur that are related to establishment and maintenance of the ADS program, including investor relations expenses and exchange application and listing fees. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not related to the amounts of fees the depositary collects from investors. We received reimbursements in the amount of US$202,990 and US$195,472 in 2012 and 2014, respectively. We did not receive any reimbursements in 2013.

PART II

Item 13.Defaults, Dividend Arrearages and Delinquencies.

None.

Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.

Use of proceeds

The following “Use of Proceeds” information relates to our initial public offering, at US$11.00 per ADS, of 7,100,000 ADSs, every two ADSs representing three ordinary shares, of which 6,700,000 ADSs were offered by our company and 400,000 ADSs were offered by a selling shareholder. The aggregate offering price was US$78,100,000, with US$73,700,000 for the ADSs offered by us and US$4,400,000 for the ADSs offered by the selling shareholder. The registration statement on Form F-1 (File No. 333-173619) for our initial public offering was declared effective by the SEC on May 11, 2011. On May 16, 2011, we completed our initial public offering after all of the registered securities were sold. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., China International Capital Corporation Hong Kong Securities Limited, Oppenheimer & Co. Inc. and Stifel, Nicolaus & Company, Incorporated were the underwriters for our initial public offering.

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The total expenses we incurred in connection with our initial public offering were approximately US$8.5 million, including underwriting discounts and commissions of approximately US$5.2 million and other fees and expenses of approximately US$3.3 million.

We received net proceeds of approximately US$65.2 million from our initial public offering. From May 11, 2011, the effective date of our registration statement on Form F-1 for the offering, to December 31, 2013, we used the net proceeds as follows:

·     in 2011, approximately US$4.0 million to pay accrued but unpaid dividends due to the holders of our Series A preferred shares payable upon the completion of our initial public offering, including US$3.0 million to Fame Gain, Qiming Venture Partners, L.P. and Qiming Managing Directors Fund, L.P.;

·     in 2012, approximately US$11.2 million was used for general corporate purposes;

·     in 2013, approximately US$7.8 million and US$5.4 million was used to pay the special cash dividend announced in May 2013 and for our share repurchases, respectively; and

·in 2014, approximately US$19.8 million and US$4.3 million were used to pay the special cash dividend announced in October 2014 and for our share repurchases, respectively.

Proceeds from our initial public offering that have yet to be applied have been invested in bank deposits.

Item 15.Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2014, the end of the period covered by this annual report, and has concluded that, as of such date, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management or our board of directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our interim or annual consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the SEC, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014 using criteria established in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment, our management has concluded that our internal control over financial reporting was effective as of December 31, 2014.

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The effectiveness of our internal control over financial reporting as of December 31, 2014 has been audited by PricewaterhouseCoopers Zhong Tian LLP, an independent registered public accounting firm, as stated in their report which is included in Item 18 of this Annual Report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the periods covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16A.  Audit Committee Financial Expert.

Our board of directors has determined that Mr. Paul Keung qualifies as an audit committee financial expert under the applicable SEC rules and as a financially sophisticated audit committee member under Rule 5605(c)(2)(A) of the Nasdaq Listing Rules.

Item 16B.  Code of Ethics.

Our board of directors adopted a code of business conduct and ethics that applies to our directors, officers, employees and advisors. We have filed our code of business conduct and ethics as Exhibit 99.1 of our registration statement on Form F-1 (file No. 333-173619) filed with the Securities and Exchange Commission on April 20, 2011 and posted a copy of our code of business conduct and ethics on our investor relations website at http://ir.jiayuan.com/governance.cfm. We hereby undertake to provide to any person without charge, upon a written request, a copy of our code of business conduct and ethics.

Item 16C.  Principal Accountant Fees and Services.

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by PricewaterhouseCoopers Zhong Tian LLP, our principal external auditors, for the periods indicated.

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	Years ended December 31,
	2013	2014
	(In thousands, in RMB)
Audit fees (1)	5,500	5,500
Audit-related fees (2)	—	—
Tax fees (3)	—	400
All other fees (4)	—	—

(1)“Audit fees” means the aggregate fees for professional services rendered by our principal auditors for the audit of our annual consolidated financial statements or services that are normally provided by the auditors in connection with statutory and regulatory filings. Services comprising the fees disclosed under this category also involved limited reviews performed on our consolidated financial statements.

(2)“Audit-related fees” means the aggregate fees for professional services rendered by our principal auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.” Services relating to the fees disclosed under “Audit-related fees” primarily include those services relating to our initial public offering and the issuance of comfort letters.

(3)“Tax fees” means the aggregate fees for professional services rendered by our principal auditors for tax compliance, tax advice, and tax planning.

(4)“All other fees” comprise fees for all other services provided by our principal auditor, other than those services covered in footnotes (1) to (3) above.

The policy of our audit committee is to pre-approve all audit and non-audit services provided by PricewaterhouseCoopers Zhong Tian LLP, including audit services, audit-related services, tax services and other services as described above.  All audit and non-audit services disclosed in the table above were pre-approved by the audit committee or the full board of directors in the event such services were pre-approved prior to the formation of the audit committee.

Item 16D.  Exemptions from the Listing Standards for Audit Committee.

Not applicable.

Item 16E.  Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

The following tables set forth information about our repurchases made in the fiscal year ended December 31, 2014.

Period	Total Number of ADSs Purchased(1)	Average Price Paid Per ADS	Total Number of ADSs Purchased as Part of Publicly Announced Program(1)	Maximum Dollar Value of ADSs that May Yet be Purchased Under Publicly Announced Program(1)
		(US$)		(US$)
January 2014	—	—	2,936,119	4,564,761
February 2014	—	—	2,936,119	4,564,761
March 2014	—	—	2,936,119	4,564,761
April 2014	73,200	5.95	3,009,319	4,128,284
May 2014	314,300	5.66	3,323,619	2,340,998
June 2014	146,900	5.74	3,470,519	1,494,048
July 2014	70,919	5.44	3,541,438	1,107,834
August 2014	21,922	5.46	3,563,360	987,503
September 2014	—	—	3,563,360	987,503
October 2014	—	—	3,563,360	987,503
November 2014	—	—	3,563,360	987,503
December 2014	149,100	4.73	3,712,460	277,957
	776,341	5.52

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(1)All repurchases shown on the table were made pursuant to the share repurchase program that was approved by our board of directors in December 2012, or the 2013 repurchase program. Pursuant to this program, we announced our intention to repurchase up to US$10 million worth of our outstanding ADSs from time to time, depending on market conditions, trading price and other factors, as well as subject to applicable securities laws. In November 2013, our board of directors approved a twelve-month extension of the 2013 repurchase program to repurchase up to an aggregate of the remainder of which was not spent under the 2013 repurchase program. Our board of directors will review this share repurchase program periodically and may authorize the adjustment of its terms and size accordingly.

Item 16F.  Change in Registrant’s Certifying Accountant.

Not applicable.

Item 16G.  Corporate Governance.

We are incorporated in the Cayman Islands and our corporate governance practices are governed by applicable Cayman Islands law.  In addition, because our ADSs are listed on the Nasdaq Global Select Market, we are subject to Nasdaq corporate governance requirements.  Nasdaq Listing Rule 5615(a)(3) permits foreign private issuers like us to follow “home country practice” with respect to certain corporate governance matters. We are committed to a high standard of corporate governance.  As such, we endeavor to comply with most of the Nasdaq corporate governance practices and believe that we are currently in compliance with the NASDAQ corporate governance practices.

Item 16H.  Mine Safety Disclosure.

Not applicable.

PART III

Item 17.   Financial Statements.

We have elected to provide financial statements pursuant to Item 18.

Item 18.   Financial Statements

The consolidated financial statements for our company are included at the end of this annual report.

Item 19.   Exhibits.

Exhibit No.	Description of Exhibit
1.1	Second Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated by reference to Exhibit 3.2 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
2.1	Form of Ordinary Share Certificate (incorporated by reference to Exhibit 4.1 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
2.2	Form of Deposit Agreement between the Registrant, Citibank, N.A., as depositary, and holder of the American depositary receipts (incorporated by reference to Exhibit 99.A of our registration statement on Form F-6 (File No. 333-173756), as amended, initially filed with the Commission on April 27, 2011).
2.3	Form of American depositary receipt evidencing American depositary shares (included in Exhibit 2.2) (incorporated by reference to Exhibit 99.A of our registration statement on Form F-6 (File No. 333-173756), as amended, initially filed with the Commission on April 27, 2011).
4.1	Shareholders’ Agreement dated January 26, 2011, among the Registrant and other parties therein (incorporated by reference to Exhibit 4.4 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).

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4.2	Shareholders’ Agreement dated May 14, 2007, among Harper and other parties therein (incorporated by reference to Exhibit 4.5 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.3	Preferred Share Purchase Agreement dated April 16, 2007, among Harper and other parties therein (incorporated by reference to Exhibit 4.6 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.4	2007 Share Incentive Plan dated April 16, 2007 (as amended), and form of Option Agreement (incorporated by reference to Exhibit 10.1 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.5	2007 Share Incentive Plan (as amended and restated on June 15, 2013) (incorporated by reference to Exhibit 4.1 of our registration statement on Form S-8 (File No. 333-184079) filed with the Commission on September 25, 2013).
4.6	Form of Restricted Share Award agreement (incorporated by reference to Exhibit 4.6 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 29, 2013).
4.7	Form of Indemnification Agreement between the Registrant and each of its directors (incorporated by reference to Exhibit 10.3 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.8	Form of Confidentiality and Non-Competition Agreement among the Registrant and its officers and employees (incorporated by reference to Exhibit 10.4 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.9	English translation of Form of Employment Agreement between the Registrant and the management of the Registrant (incorporated by reference to Exhibit 10.5 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.10	English translation of Loan Contract between Shanghai Miyuan and Haiyan Gong, dated July 10, 2007 (incorporated by reference to Exhibit 10.6 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.11	English translation of Loan Contract between Jiayuan Hong Kong and Haiyan Gong, dated November 12, 2010 (incorporated by reference to Exhibit 10.7 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.12	English translation of Restated Agreement of Loan Agreement among Haiyan Gong, Xu Liu and Shanghai Miyuan, dated January 25, 2011 (incorporated by reference to Exhibit 10.8 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.13	English translation of Restated Agreement of Exclusive Technology License and Service Agreement between Shanghai Huaqianshu and Shanghai Miyuan, dated January 25, 2011 (incorporated by reference to Exhibit 10.9 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.14	English translation of Exclusive Technology License and Service Agreement between Jiayuan Shanghai Center and Shanghai Miyuan, dated January 25, 2011 (incorporated by reference to Exhibit 10.10 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.15	English translation of Amended and Restated Agreement of Exclusive Purchase Option Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Shanghai Miyuan and Shanghai Huaqianshu, dated January 25, 2011 (incorporated by reference to Exhibit 10.11 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.16	English translation of Amended and Restated Agreement of Equity Pledge Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu and Shanghai Miyuan, dated January 25, 2011 (incorporated by reference to Exhibit 10.12 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.17	English translation of Amended and Restated Agreement of Shareholders’ Voting Rights Entrustment Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Shanghai Miyuan and Shanghai Huaqianshu, dated January 25, 2011 (incorporated by reference to Exhibit 10.13 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).

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4.18	English translation of Cooperative Operation Agreement among Shanghai Miyuan, Shanghai Huaqianshu and Jiayuan Shanghai Center, dated January 25, 2011 (incorporated by reference to Exhibit 10.14 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.19	English translation of Exclusive Technology License and Service Agreement between Beijing Huaqianshu and Beijing Miyuan, dated February 17, 2011 (incorporated by reference to Exhibit 10.15 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.20	English translation of Exclusive Equity Transfer Option Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan and Beijing Huaqianshu, dated February 17, 2011 (incorporated by reference to Exhibit 10.16 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.21	English translation of Equity Pledge Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu and Beijing Miyuan, dated February 17, 2011 (incorporated by reference to Exhibit 10.17 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.22	English translation of Shareholders’ Voting Rights Entrustment Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan and Beijing Huaqianshu, dated February 17, 2011 (incorporated by reference to Exhibit 10.18 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.23	English translation of Exclusive Technology License and Service Agreement between Xique and Beijing Miyuan, dated February 17, 2011 (incorporated by reference to Exhibit 10.19 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.24	English translation of Exclusive Purchase Option Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan and Xique, dated February 17, 2011 (incorporated by reference to Exhibit 10.20 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.25	English translation of Equity Pledge Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu and Beijing Miyuan, dated February 17, 2011 (incorporated by reference to Exhibit 10.21 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.26	English translation of Shareholders’ Voting Rights Entrustment Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan and Xique, dated February 17, 2011 (incorporated by reference to Exhibit 10.22 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.27	English translation of Loan Agreement among Haiyan Gong, Yu Zhang and Beijing Miyuan, dated February 17, 2011 (incorporated by reference to Exhibit 10.23 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.28	English translation of Loan Agreement among Haiyan Gong, Yu Zhang and Beijing Miyuan, dated February 17, 2011 (incorporated by reference to Exhibit 10.24 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.29	English translation of 2011 Cooperation Agreement and Framework Contract for Search Engine Advertising between Shanghai Huaqianshu and Beijing Angran Time Advertising Co., Ltd., dated April 7, 2011 (incorporated by reference to Exhibit 10.25 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.30	English translation of Contract Transfer Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Qingjun Zhu, Cheng Li, Fuping Yu, Yu Zhang, Beijing Miyuan and Shanghai Miyuan, dated April 5, 2011 (incorporated by reference to Exhibit 10.27 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).

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4.31	English translation of Contract Assignment Agreement among Haiyan Gong, Yongqiang Qian, Xu Liu, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan, Shanghai Miyuan and Beijing Huaqianshu, dated May 6, 2011 (incorporated by reference to Exhibit 10.28 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.32	English translation of Contract Assignment Agreement among Haiyan Gong, Yongqiang Qian, Xu Liu, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan, Shanghai Miyuan and Xique, dated May 6, 2011 (incorporated by reference to Exhibit 10.29 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
4.33	English translation of Exclusive Technology License and Service Agreement between Beijing Aizhenxin and Beijing Miyuan, dated August 13, 2013 (incorporated by reference to Exhibit 4.33 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 29, 2013).
4.34	English translation of Exclusive Purchase Option Agreement among Tao Lu, Hui Song, Beijing Miyuan and Beijing Aizhenxin , dated August 13, 2013 (incorporated by reference to Exhibit 4.34 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 29, 2013).
4.35	English translation of Shareholders’ Voting Rights Entrustment Agreement among Beijing Aizhenxin, Beijing Miyuan, Tao Lu, Hui Song and Yu Zhang, dated August 13, 2013 (incorporated by reference to Exhibit 4.35 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 29, 2013).
4.36	English translation of Equity Pledge Agreement among Tao Lu, Hui Song, Yu Zhang and Beijing Miyuan, dated August 13, 2013 (incorporated by reference to Exhibit 4.36 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 29, 2013).
4.37	English translation of Loan Agreement among Tao Lu, Hui Song, Yu Zhang and Beijing Miyuan, dated August 13, 2013 (incorporated by reference to Exhibit 4.36 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 29, 2013).
4.38	English summary of Secondhand Housing Purchase and Sale Contract of Beijing Municipality, dated November 26, 2013 (incorporated by reference to Exhibit 99.1 of our current report on Form 6-K (File No. 001-35157) furnished with the Commission on April 11, 2013).
4.39	English summary of Supplemental Agreement to Secondhand Housing Purchase and Sale Contract of Beijing Municipality (incorporated by reference to Exhibit 99.2 of our current report on Form 6-K (File No. 001-35157) furnished with the Commission on April 11, 2013).
4.40	English translation of Contract for Retaining Special Consultant between Shanghai Huaqianshu and Haiyan Gong, dated December 24, 2013 (incorporated by reference to Exhibit 4.40 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 29, 2013).
4.41	Consent letter among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Huaqianshu Information Technology Co., td., Beijing Shiji Xique Information Technology Co., Ltd., Shanghai Huaqianshu Information Technology Co., Ltd., Shanghai Shiji Jiayuan Matchmaking Service Center, Beijing Miyuan Information Technology Co., Ltd. and Miyuan (Shanghai) Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.41 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.42	English Translation of Amended and Restated Exclusive Technology License and Services Agreement between Shanghai Huaqianshu Information Technology Co., Ltd. and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.42 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.43	English Translation of Amended and Restated Exclusive Technology License and Services Agreement between Shanghai Shiji Jiayuan Matchmaking Service Center and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.43 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).

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4.44	English Translation of Amended and Restated Exclusive Technology License and Services Agreement between Beijing Huaqianshu Information Technology Co., Ltd. and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.44 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.45	English Translation of Amended and Restated Exclusive Technology License and Services Agreement between Beijing Shiji Xique Information Technology Co., Ltd. and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.45 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.46	English Translation of Amended and Restated Loan Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.46 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.47	English Translation of Amended and Restated Shareholders’ Voting Rights Entrustment Agreement among Beijing Miyuan Information Technology Co., Ltd., Shanghai Huaqianshu Information Technology Co., Ltd., Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu and Qingjun Zhu, dated March 1, 2014 (incorporated by reference to Exhibit 4.47 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.48	English Translation of Amended and Restated Exclusive Purchase Option Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan Information Technology Co., Ltd. and Shanghai Huaqianshu Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.48 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.49	English Translation of Amended and Restated Equity Pledge Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu and Qingjun Zhu and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.49 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.50	English Translation of Amended and Restated Cooperative Operation Agreement among Beijing Miyuan Information Technology Co., Ltd., Shanghai Huaqianshu Information Technology Co., Ltd. and Shanghai Shiji Jiayuan Matchmaking Service Center, dated March 1, 2014 (incorporated by reference to Exhibit 4.50 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.51	English Translation of Amended and Restated Loan Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.51 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.52	English Translation of Amended and Restated Shareholders’ Voting Rights Entrustment Agreement among Beijing Miyuan Information Technology Co., Ltd., Beijing Huaqianshu Information Technology Co., Ltd., Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu and Qingjun Zhu, dated March 1, 2014 (incorporated by reference to Exhibit 4.52 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.53	English Translation of Amended and Restated Exclusive Purchase Option Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan Information Technology Co., Ltd. and Beijing Huaqianshu Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.53 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.54	English Translation of Amended and Restated Equity Pledge Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu and Qingjun Zhu and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.54 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
4.55	English Translation of Amended and Restated Loan Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.55 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).

103

4.56

English Translation of Amended and Restated Shareholders’ Voting Rights Entrustment Agreement among Beijing Miyuan Information Technology Co., Ltd., Beijing Shiji Xique Information Technology Co., Ltd., Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu and Qingjun Zhu, dated March 1, 2014 (incorporated by reference to Exhibit 4.56 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).

4.57

English Translation of Amended and Restated Exclusive Purchase Option Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu, Qingjun Zhu, Beijing Miyuan Information Technology Co., Ltd. and Beijing Shiji Xique Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.57 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).

104

4.58	English Translation of Amended and Restated Equity Pledge Agreement among Haiyan Gong, Xu Liu, Yongqiang Qian, Cheng Li, Fuping Yu and Qingjun Zhu and Beijing Miyuan Information Technology Co., Ltd., dated March 1, 2014 (incorporated by reference to Exhibit 4.58 of our annual report on Form 20-F (File No. 001-35157) filed with the Commission on April 30, 2014).
8.1*	Subsidiaries of the Registrant.
11.1	Code of Business Conduct and Ethics (incorporated by reference to Exhibit 99.1 of our registration statement on Form F-1 (File No. 333-173619), as amended, initially filed with the Commission on April 20, 2011).
12.1*	CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*	CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**	CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**	CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*	Consent of PricewaterhouseCoopers Zhong Tian LLP.
15.2*	Consent of Zhong Lun Law Firm.
15.3*	Consent of iResearch Consulting Group
15.4*	Consent of Maples & Calder
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

*Filed with this annual report on Form 20-F.

**Furnished with this annual report on Form 20-F.

105

Signatures

The registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Jiayuan.com International Ltd.
By:	/s/ Linguang Wu
Name:	Linguang Wu
Title:	Chief Executive Officer

Date:  April 16, 2015

106

INDEX TO FINANCIAL STATEMENTS

CONTENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2013 and 2014	F-3
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2012, 2013 and 2014	F-4
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2012, 2013 and 2014	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2012, 2013 and 2014	F-6
Notes to Consolidated Financial Statements	F-7- F-39

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Jiayuan.com International Ltd.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of comprehensive income, of changes in shareholders’ equity and of cash flows present fairly, in all material respects, the financial position of Jiayuan.com International Ltd. and its subsidiaries (collectively, the “Company”) at December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting included in Item 15 of this Annual Report on Form 20-F. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers Zhong Tian LLP

Beijing, the People’s Republic of China
April 16, 2015

F-2

JIAYUAN.COM INTERNATIONAL LTD.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2013 AND 2014

(All amounts in thousands, except share and per share data)

	As of December 31,
	2013		2014		2014
	RMB		RMB		US$
					(Note 3(c))
ASSETS
Current assets:
Cash and cash equivalents	232,613		196,857		31,728
Short-term deposits	336,299		239,466		38,595
Available-for-sale securities	5,233		15,715		2,533
Accounts receivable, net	33,987		37,745		6,083
Deferred tax assets	3,628		8,982		1,448
Prepaid expenses and other current assets	23,695		66,501		10,718
Total current assets	635,455		565,266		91,105
Non-current assets:
Investment in equity investee	—		11,048		1,781
Property and equipment, net	99,484		91,694		14,778
Intangible assets, net	4,275		3,610		582
Goodwill	789		789		127
Other non-current assets	—		1,039		167
Total assets	740,003		673,446		108,540
LIABILITIES
Current liabilities:
Accounts payable (including accounts payable of the consolidated variable interest entities and VIE’s subsidiary without recourse to the Company of RMB5,864 and RMB20,692 as of December 31, 2013 and 2014, respectively)	5,864		20,692		3,335
Deferred revenue, current portion (including deferred revenue, current portion of the consolidated variable interest entities and VIE’s subsidiary without recourse to the Company of RMB125,391and RMB 189,018 as of December 31, 2013 and 2014, respectively)	125,391		189,018		30,464
Accrued expenses and other liabilities, current portion (including accrued expenses and other current liabilities, current portion, of the consolidated variable interest entities and VIE’s subsidiary without recourse to the Company of RMB34,843 and RMB38,243 as of December 31, 2013 and 2014, respectively)	39,615		45,490		7,332
Income tax payable (including income tax payable of the consolidated variable interest entities and VIE’s subsidiary without recourse to the Company of RMB20,606 and RMB16,927 as of December 31, 2013 and 2014, respectively)	22,226		19,037		3,068
Total current liabilities	193,096		274,237		44,199
Non-current liabilities:
Deferred revenue, non-current portion (including deferred revenue, non-current portion, of the consolidated variable interest entities and VIE’s subsidiary without recourse to the Company of RMB369 and RMB2 as of December 31, 2013 and 2014, respectively)	369		2		0
Accrued expenses and other liabilities, non-current portion (including other non-current liabilities of the consolidated variable interest entities and VIE’s subsidiary without recourse to the Company of RMB 2,730 and RMB5,650 as of December 31, 2013 and 2014, respectively)	2,730		5,650		911
Deferred tax liabilities	4,590		6,517		1,050
Total liabilities	200,785		286,406		46,160
Commitments and contingencies (Note 18)
SHAREHOLDERS’ EQUITY
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized as of December 31, 2013 and 2014; 49,030,944 shares issued and outstanding as of December 31, 2013; 49,930,944 shares issued and outstanding as of December 31, 2014)	349		354		57
Additional paid-in capital	506,458		358,768		57,823
Less: Treasury shares (4,145,729 and 5,310,240 shares as of December 31, 2013 and 2014, respectively)	(91,100	)	(117,480	)	(18,934	)
Statutory reserves	9,974		10,103		1,628
Retained earnings	126,367		146,345		23,587
Accumulated other comprehensive loss	(12,830	)	(11,050	)	(1,781	)
Total shareholders’ equity	539,218		387,040		62,380
Total liabilities and shareholders’ equity	740,003		673,446		108,540

The accompanying notes are an integral part of these consolidated financial statements.

F-3

JIAYUAN.COM INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(All amounts in thousands, except share and per share data)

	For the Year Ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
							(Note 3(c))
Net revenues	410,803		492,606		613,990		98,957
Cost of revenues	(143,685	)	(180,521	)	(277,789	)	(44,772	)
Gross profit	267,118		312,085		336,201		54,185
Operating expenses:
Selling and marketing expenses	(143,376	)	(183,619	)	(252,736	)	(40,734	)
General and administrative expenses	(54,367	)	(52,565	)	(58,071	)	(9,359	)
Research and development expenses	(17,587	)	(21,918	)	(23,149	)	(3,731	)
Total operating expenses	(215,330	)	(258,102	)	(333,956	)	(53,824	)
Operating income	51,788		53,983		2,245		361
Interest income	13,323		11,687		17,658		2,846
Foreign currency exchange (loss)/income, net	(1,845	)	1,935		(1,361	)	(219	)
Other income, net	4,898		9,104		4,572		737
Income before income tax	68,164		76,709		23,114		3,725
Income tax expenses	(9,227	)	(13,053	)	(3,007	)	(485	)
Net income	58,937		63,656		20,107		3,240
Net income	58,937		63,656		20,107		3,240
Other comprehensive (loss)/income:
Foreign currency translation adjustments, net of tax of RMB nil	(772	)	(9,018	)	1,780		287
Comprehensive income	58,165		54,638		21,887		3,527
Net income per share:
Basic	1.27		1.42		0.45		0.07
Diluted	1.23		1.39		0.44		0.07
Weighted average shares used in calculating net income per share, basic	46,297,314		44,910,676		44,423,885		44,423,885
Weighted average shares used in calculating net income per share, diluted	47,743,098		45,827,922		45,390,809		45,390,809
Net income per ADS :
Basic	1.91		2.13		0.68		0.11
Diluted	1.85		2.08		0.66		0.11
Weighted average shares used in calculating net income per ADS, basic	30,864,876		29,940,450		29,615,923		29,615,923
Weighted average shares used in calculating net income per ADS, diluted	31,828,732		30,551,948		30,260,539		30,260,539

The accompanying notes are an integral part of these consolidated financial statements.

F-4

JIAYUAN.COM INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(All amounts in thousands, except share data)

												Accumulated
	Outstanding ordinary				Additional							other		Total
	shares				paid-in		Treasury		Statutory	Retained		comprehensive		Shareholders’
	Shares		Amount		capital		shares		reserves	earnings		loss		equity
			RMB		RMB		RMB		RMB	RMB		RMB		RMB
Balance as of December 31, 2011	47,489,394		339		522,470		—		5,792	7,956		(3,040	)	533,517
Net income	—		—		—		—		—	58,937		—		58,937
Issuance of ordinary shares upon exercise of options	913,801		6		6,037		—		—	—		—		6,043
Use of ordinary shares under depository for exercise of options	(13,801	)	—		—		—		—	—		—		—
Share-based compensation	—		—		13,363		—		—	—		—		13,363
Appropriation to statutory reserves	—		—		—		—		3,710	(3,710	)	—		—
Repurchase of ordinary shares	—		—		—		(63,702	)	—	—		—		(63,702	)
Cancellation of treasury shares	(258,450	)	(2	)	(5,697	)	5,699		—	—		—		—
Foreign currency translation adjustments	—		—		—		—		—	—		(772	)	(772	)
Balance as of December 31, 2012	48,130,944		343		536,173		(58,003	)	9,502	63,183		(3,812	)	547,386
Net income	—		—		—		—		—	63,656		—		63,656
Issuance of ordinary shares upon exercise of options	981,992		6		8,103		—		—	—		—		8,109
Use of ordinary shares under depository for exercise of options	(81,992	)	—		—		—		—	—		—		—
Share-based compensation	—		—		10,428		—		—	—		—		10,428
Appropriation to statutory reserves	—		—		—		—		472	(472	)	—		—
Repurchase of ordinary shares	—		—		—		(33,097	)	—	—		—		(33,097	)
Dividend distribution to shareholders	—		—		(48,246	)	—		—	—		—		(48,246	)
Foreign currency translation adjustments	—		—		—		—		—	—		(9,018	)	(9,018	)
Balance as of December 31, 2013	49,030,944		349		506,458		(91,100	)	9,974	126,367		(12,830	)	539,218
Net income	—		—		—		—		—	20,107		—		20,107
Issuance of ordinary shares upon exercise of options	647,269		5		8,699		—		—	—		—		8,704
Issuance of ordinary shares to depository for future exercise of options	252,731		—		—		—		—	—		—		—
Share-based compensation	—		—		9,562		—		—	—		—		9,562
Appropriation to statutory reserves	—		—		—		—		129	(129	)	—		—
Repurchase of ordinary shares	—		—		—		(26,380	)	—	—		—		(26,380	)
Dividend distribution to shareholders	—		—		(165,951	)	—		—	—		—		(165,951	)
Foreign currency translation adjustments	—		—		—		—		—	—		1,780		1,780
Balance as of December 31, 2014	49,930,944		354		358,768		(117,480	)	10,103	146,345		(11,050	)	387,040

The accompanying notes are an integral part of these consolidated financial statements.

F-5

JIAYUAN.COM INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(In thousands)

	For the Year ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
							((c))
Cash flows from operating activities
Net income	58,937		63,656		20,107		3,240
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,406		16,175		14,381		2,318
Share-based compensation	13,363		10,428		9,562		1,541
Foreign currency exchange loss/(income), net	1,845		(1,935	)	1,361		219
Deferred taxation	474		3,533		(3,427	)	(552	)
Loss from disposal of property, plant and equipment	786		5		218		35
Dividend income from available-for-sale securities	(47	)	(186	)	(482	)	(78	)
Changes in operating assets and liabilities:
Accounts receivable, net	(23,808	)	6,115		(3,772	)	(608	)
Prepaid expenses and other assets	(31,656	)	20,901		(44,687	)	(7,202	)
Deferred revenue	32,026		15,187		63,260		10,196
Accounts payable	59		4,458		15,071		2,429
Accrued expenses and other current liabilities	(5,359	)	18,887		8,795		1,417
Income tax payable	(2,341	)	9,743		(3,189	)	(514	)
Net cash provided by operating activities	57,685		166,967		77,198		12,441
Cash flows from investing activities
Purchase of short-term deposits	(233,025	)	(326,299	)	(239,466	)	(38,595	)
Maturity of short-term deposits	404,500		233,025		336,299		54,202
Purchase of property, plant and equipment	(83,072	)	(18,168	)	(5,541	)	(893	)
Purchase of intangible assets	—		(305	)	—		—
Consideration paid for a business combination	(4,500	)	—		—		—
Proceeds from disposal of property, plant and equipment	57		—		14		2
Purchase of available-for-sale securities	(5,000	)	—		(10,000	)	(1,612	)
Investment in equity investee	—		—		(11,048	)	(1,781	)
Net cash provided by/(used in) investing activities	78,960		(111,747	)	70,258		11,323
Cash flows from financing activities
Issuance of ordinary shares upon exercise of share options, net of issuance cost	6,043		8,109		8,704		1,403
Payment of dividend to ordinary shareholders	—		(48,246	)	(165,951	)	(26,746	)
Repurchase of ordinary shares	(63,702	)	(33,097	)	(26,380	)	(4,252	)
Net cash used in financing activities	(57,659	)	(73,234	)	(183,627	)	(29,595	)
Effect of exchange rate changes on cash and cash equivalents	(2,617	)	(7,082	)	415		69
Net increase/(decrease) in cash and cash equivalents	76,369		(25,096	)	(35,756	)	(5,762	)
Cash and cash equivalents at beginning of year	181,340		257,709		232,613		37,490
Cash and cash equivalents at end of year	257,709		232,613		196,857		31,728
Supplemental disclosure of cash flow information
Income tax paid	(11,094	)	(1,115	)	(9,623	)	(1,551	)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

JIAYUAN.COM INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data, unless otherwise stated)

1.Principal Activities and Organization

a)Principal activities

Jiayuan.com International Ltd. (“Jiayuan”, or the “Company”), through its subsidiaries, its variable interest entities (“VIEs”), and VIE’s subsidiary (collectively, the “Group”), is principally engaged in operating online dating services in the People’s Republic of China (the “PRC” or “China”) through its online dating platforms which can be accessed through the jiayuan.com, izhenxin.com, juedui100.com, imdali.com and qiuai.com websites, wireless application protocol (“WAP”) browsers and wireless applications. The Group also hosts events and performs personalized matchmaking services to help individuals find suitable partners.

b)Organization

The Company was incorporated in the Cayman Islands on September 29, 2010.

Prior to February 2007, the Group’s business was operated through its PRC domestic company, Shanghai Huaqianshu Information Technology Co., Ltd. (“Shanghai HQS”), which was directly or indirectly, owned or controlled by Ms. Haiyan Gong, Mr. Yongqiang Qian, Mr. Xu Liu, and Ms. Jing Yang (the “Founding Shareholders”).

In February 2007, the Founding Shareholders undertook a reorganization (the “Reorganization”) and established Harper Capital Inc., an investment holding company under the laws of the British Virgin Islands (the “BVI Company”). Subsequently, in May 2007, the BVI Company established Miyuan (Shanghai) Information Technology Co., Ltd. (“Shanghai Miyuan”) as a wholly-owned foreign enterprise in the PRC. The Reorganization was necessary to comply with PRC laws and regulations which prohibit or restrict foreign ownership of companies that provide Internet content services in the PRC where licenses are required.  On January 26, 2011, the Company issued shares to the shareholders of BVI Company at an exchange ratio of one to one, or the Share Swap. After the Share Swap, BVI Company became a direct wholly-owned subsidiary.

By entering into a series of agreements among the Founding Shareholders, Shanghai HQS, Beijing Huaqianshu Information Technology Co., Ltd. (“Beijing HQS”), Beijing Shiji Xique Information Technology Co., Ltd. (“Xique”) and Shanghai Miyuan, Shanghai HQS, Beijing HQS and Xique became variable interest entities (“VIEs”) of Shanghai Miyuan and consequently, Shanghai Miyuan became the primary beneficiary of Shanghai HQS, Beijing HQS and Xique (see Note 2).

On May 16, 2011, the Company completed an initial public offering (“IPO”) of 6,700,000 American depositary shares (“ADSs”), representing 10,050,000 ordinary shares, in the NASDAQ Global Select Market. The net proceeds received by the Company from the IPO, after deducting commissions and offering expenses, amounted to approximately US$65,243. Upon the completion of the IPO, all of the Company’s then outstanding Series A redeemable convertible preferred shares (“Series A Preferred Shares”) were converted into the same number of ordinary shares.

On August 13, 2012, Beijing Miyuan Information Technology Co. Ltd. (“Beijing Miyuan”), a wholly owned foreign enterprise established by Jiayuan Hong Kong Corporation Limited (“Jiayuan Hong Kong”), entered into a series of contractual arrangements with Beijing Aizhenxin Information Technology Co., Ltd. (“Beijing Aizhenxin”), an entity incorporated in the PRC, and its legal shareholders to acquire effective control over Beijing Aizhenxin. As a result, Beijing Aizhenxin became a VIE of Beijing Miyuan. Beijing Miyuan became the primary beneficiary of Beijing Aizhenxin (see Note 2).

On March 1, 2014, Shanghai Miyuan, Beijing Miyuan, Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders and Shiji Jiayuan Matchmaking Services Center (“Jiayuan Shanghai Center”), the subsidiary of Shanghai HQS, entered into assignment agreements whereby Shanghai Miyuan transferred its obligations and rights under the contractual arrangements with Shanghai HQS, Beijing HQS, Xique and their respective shareholders and Jiayuan Shanghai Center to Beijing Miyuan. In addition, Beijing Miyuan entered into contractual agreements with Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders, and Jiayuan Shanghai Center on March 1, 2014 (see Note 2).

F-7

As of December 31, 2014, the Company’s subsidiaries, VIEs and VIE’s subsidiary included the following entities:

Name	Date of incorporation or establishment	Place of incorporationor establishment /operations	Percentage of direct or indirect economic ownership		Principal  activities
Subsidiaries
Harper Capital Inc. (“BVI Company”)	February 6, 2007	British Virgin Islands	100	%	Investment holding
Miyuan (Shanghai) Information Technology Co., Ltd. (“Shanghai Miyuan”)	April 27, 2007	PRC	100	%	Investment holding and consulting services
Jiayuan Hong Kong Corporation Limited (“Jiayuan Hong Kong”)	October 5, 2010	Hong Kong	100	%	Investment holding and overseas online dating services
Beijing Miyuan Information Technology Co., Ltd. (“Beijing Miyuan”)	January 26, 2011	PRC	100	%	Investment holding and consulting services
Variable interest entities (“VIEs”)
Shanghai Huaqianshu Information Technology Co., Ltd. (“Shanghai HQS”)	April 6, 2004	PRC	100	%	Online dating services
Beijing Huaqianshu Information Technology Co., Ltd. (“Beijing HQS”)	November 26, 2010	PRC	100	%	Online dating services and personalized matchmaking services
Beijing Shiji Xique Information Technology Co., Ltd. (“Xique”)	November 26, 2010	PRC	100	%	Online wedding planning services
Beijing Aizhenxin Information Technology Co., Ltd. (“Beijing Aizhenxin”)	August 13, 2012	PRC	100	%	Online dating services
VIE’s subsidiary
Shiji Jiayuan Matchmaking Services Center (“Jiayuan Shanghai Center”)	December 3, 2010	PRC	100	%	Events and personalized matchmaking services

2.Variable Interest Entities

To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provide Internet content services in the PRC, the Company provides its services through VIEs which hold the licenses and approvals to provide Internet content services in the PRC. The Company also provides certain personalized matchmaking services through Shanghai HQS, Beijing HQS and Jiayuan Shanghai Center which holds the licenses and approvals to provide personalized matchmaking services. The Company obtained substantial ability to control VIEs and VIE’s subsidiary through a series of contractual agreements entered into among Beijing Miyuan, VIEs and their respective legal shareholders and VIE’s subsidiary.

The Group adopted Financial Accounting Standard Board (the “FASB”) guidance on consolidating variable interest entities which require certain variable interest entities to be consolidated by the primary beneficiary of the entity. Management evaluated the relationships among Beijing Miyuan, VIEs and their legal shareholders, and VIE’s subsidiary, and concluded that Beijing Miyuan is the primary beneficiary of VIEs and VIE’s subsidiary as Beijing Miyuan is entitled to substantially all the economic risks and rewards of VIEs and VIE’s subsidiary, and has the power to direct the activities that most significantly impact the economic performance of VIEs and VIE’s subsidiary. As a result, VIEs’ and VIE’s subsidiary’s results of operations, assets and liabilities have been included in the Group’s consolidated financial statements.

The assignment agreements and contractual agreements entered into on March 1, 2014 were accounted for as reorganizations of businesses under common control in a manner similar to a pooling of interests. Accordingly, the Group continued to include the financial statements of VIEs and VIE’s subsidiary in its consolidated financial statements after the transfer.

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The following is a summary of the contractual agreements entered into among Beijing Miyuan, VIEs and their respective legal shareholders, and VIE’s subsidiary. The contractual agreements among Beijing Miyuan and Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders and Jiayuan Shanghai Center are substantially the same as those contractual agreements among Shanghai Miyuan and Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders, and Jiayuan Shanghai Center before the transfer on March 1, 2014. (Note 2(a)).

(a)Contractual arrangements among Beijing Miyuan, its respective VIEs, VIE’s subsidiary and their legal shareholders

Exclusive technology license and service agreements

Pursuant to the exclusive technology license and service agreement entered into on August 13, 2012 between Beijing Miyuan and Beijing Aizhenxin and the amended and restated exclusive technology license and service agreement entered into on March 1, 2014 among Beijing Miyuan, Shanghai HQS, Jiayuan Shanghai Center, Beijing HQS and Xique, Shanghai HQS, Jiayuan Shanghai Center, Beijing HQS, Xique and Beijing Aizhenxin retain Beijing Miyuan as their exclusive provider of software and hardware licenses, technology support, hardware and data maintenance and updates, software development, maintenance and updates, professional training, information collection and research, technology consulting services related to the business operations of Shanghai HQS, Jiayuan Shanghai Center, Beijing HQS, Xique and Beijing Aizhenxin. As consideration for such services, Shanghai HQS, Jiayuan Shanghai Center, Beijing HQS, Xique and Beijing Aizhenxin agreed to pay service fees equal to a certain percentage of their annual revenues as agreed by the parties from time to time. The aforementioned exclusive technology license and service agreements between Beijing Miyuan and Shanghai HQS, Beijing Miyuan and Beijing HQS, Beijing Miyuan and Xique, Beijing Miyuan and Beijing Aizhenxin, Beijing Miyuan and Jiayuan Shanghai Center will expire on January 24, 2021, February 16, 2021, February 16, 2021, August 12, 2022 and January 24, 2021, respectively; and, except by mutual agreement upon early termination by the parties in writing, the term of these agreements will be automatically extended for ten years.

Loan agreements

Pursuant to the loan agreement entered into on August 13, 2012 between Beijing Miyuan and the legal shareholders of Beijing Aizhenxin and the amended and restated relevant loan agreements entered into on March 1, 2014 between Beijing Miyuan and the legal shareholders of Shanghai HQS, Beijing HQS and Xique, respectively, Beijing Miyuan have granted interest-free loans of US$1,200 and RMB9,000, RMB1,000, RMB1,000 and RMB20,000 to legal shareholders of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin, respectively, which shall only be used for Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin’s working capital. The loans are repayable on demand. If the respective legal shareholders intend to voluntarily repay the loans in whole or in part, or if Beijing Miyuan requires the shareholders to repay the loans in whole or in part, Beijing Miyuan or its designee may acquire a proportionate amount of the equity interests of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin from their shareholders for a purchase price equal to the principal amount of the repaid loans. The loans have been eliminated upon the consolidation of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin.

Exclusive purchase option agreements

Pursuant to the exclusive purchase option agreement entered into on August 13, 2012 among Beijing Miyuan, Beijing Aizhenxin and its legal shareholders and the amended and restated exclusive purchase option agreements entered into on March 1, 2014 among Shanghai HQS, Beijing HQS, Xique, their respective legal shareholders and Beijing Miyuan, Beijing Miyuan has an exclusive option to purchase, or designate another qualified individual or entity to purchase, to the extent permitted by PRC law, part or all of the equity interests in Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin owned by their shareholders. The purchase prices for the entire equity interest of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin shall be the proportionate amount of the registered capital owned by such shareholders or an amount agreed by the parties in writing, provided that, in case of any compulsory requirement by then PRC law, the purchase prices shall be the minimum prices permitted by applicable PRC law. The exclusive equity transfer option agreements remain in effect until the completion of the transfer of all the shares in accordance with the agreements.

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Voting rights entrustment agreements

Pursuant to the voting right entrustment agreement entered into on August 13, 2012 among Beijing Miyuan, Beijing Aizhenxin and its legal shareholders and the amended and restated voting rights entrustment agreements entered into on March 1, 2014 among Shanghai HQS, Beijing HQS, Xique, their respective legal shareholders and Beijing Miyuan, the legal shareholders of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin grant Beijing Miyuan or its designated qualified individual or entity the right to exercise all the voting rights as provided under their then articles of association. The voting rights entrustment agreements will remain effective until January 24, 2021, February 16, 2021, February 16, 2021 and August 12, 2022, respectively. Except for mutual agreement on early termination by both parties in writing or any termination arising from Shanghai HQS, Beijing HQS, Xique, Beijing Aizhenxin or the nominee shareholders’ material breach of obligations thereunder, the term of the voting rights entrustment agreement will be automatically extended for ten years.

Equity pledge agreements

Pursuant to the equity pledge agreement entered into on August 13, 2012 between Beijing Miyuan and the legal shareholders of Beijing Aizhenxin and the amended and restated equity pledge agreements entered into on March 1, 2014 between Beijing Miyuan and their respective legal shareholders of Shanghai HQS, Beijing HQS and Xique, the legal shareholders of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin pledge all of their respective equity interests in Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin to Beijing Miyuan to secure their obligations under the exclusive technology license and service agreements, the loan agreements, the exclusive equity transfer option agreements and the voting rights entrustment agreement, each as described above. The equity pledge agreements will expire when Shanghai HQS, Beijing HQS, Xique, Beijing Aizhenxin and their shareholders have fully performed their obligations under the agreements described above.

Cooperative Operation Agreement

Pursuant to the amended and restated cooperative operation agreement entered into on March 1, 2014 among Beijing Miyuan, Shanghai HQS and Jiayuan Shanghai Center, in order to ensure Jiayuan Shanghai Center’s ability to make payments to Beijing Miyuan under the amended and restated exclusive technology license and service agreement between Jiayuan Shanghai Center and Beijing Miyuan, Shanghai HQS agrees to appoint designees of Beijing Miyuan as the members of the management committee and the key employees of Jiayuan Shanghai Center upon the request of Beijing Miyuan. This agreement will expire on January 24, 2021 and, unless terminated early by Beijing Miyuan, the term will be automatically extended for ten years.

Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs, and can have assets transferred freely out of the VIEs without any restrictions. Therefore the Company considers that there is no asset of a consolidated VIE that can be used only to settle obligations of the VIE, except for the registered capital of the VIEs amounting to a total of RMB32,500 as of December 31, 2014. As all the consolidated VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the consolidated VIEs.

Currently there is no contractual arrangement that could require the Company to provide additional financial support to the consolidated VIEs. As the Company is conducting certain business in the PRC mainly through the VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a potential loss.

Please refer to Note 4(a) for the risks relating to the VIE arrangements and the impact of the VIEs on the Company’s financial performance.

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3.Summary of Significant Accounting Policies

a)Basis of presentation and consolidation

The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries and its VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and its VIEs have been eliminated upon consolidation. The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Group in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers, or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.

A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, has controlling financial interest of the entity. The Company or its subsidiary is considered to be the primary beneficiary if the Company or its subsidiary has the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

In determining whether the Company or its subsidiaries are the primary beneficiary of the VIEs, the Company considered whether it has the power to direct activities that are significant to Shanghai HQS, Beijing HQS, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center’s economic performance, including the power to appoint senior management, right to direct company strategy, power to approve capital expenditure budgets, and power to establish and manage ordinary business operation procedures and internal regulations and systems.

There are no entities where the Company has a variable interest but is not the primary beneficiary.

b)Use of estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of the assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results may differ from those estimates.

Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include the useful lives of property and equipment and intangible assets, impairment assessments for property and equipment, intangible assets,  goodwill, investment in equity investee, allowance for doubtful accounts, valuation allowance of deferred tax assets, relative values of revenue elements of service packages, estimation of payments collected by wireless value-added services (“WVAS”) partners and determination of share-based compensation expenses. In addition, the Group uses assumptions in the valuation model to estimate the fair value of share options granted and modified. The Group bases its estimates of the carrying value of certain assets and liabilities on the historical experience and on other various factors that it believes to be reasonable under the circumstances, when the carrying values are not readily available from other sources.

c)Convenience translation

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from Renminbi (“RMB”) into United States dollars (“US$”) as of and for the year ended December 31, 2014 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.2046, representing the rate as certified by the H.10 weekly statistical release of Federal Reserve Board on December 31, 2014. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2014, or at any other rate.

d)Cash and cash equivalents

Cash and cash equivalents represent cash on hand, demand deposits and highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash.

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e)Term deposits

Term deposits represent time deposits placed with banks. Deposits with original maturities of one year or less are reported as current assets while deposits with original maturities of more than one year are reported as non-current assets. Interest earned is recorded as interest income in the consolidated statements of comprehensive income during the periods presented.

f)Available-for-sale securities

Investments in financial instruments with variable interest rates indexed to the performance of underlying assets are classified as available-for-sale securities. Available-for-sale securities are measured at fair value at the date of initial recognition and subsequently carried at fair value. To estimate fair value, the Group refers to the quoted rate of return provided by banks at the end of each reporting period. Changes in fair value are reflected in the consolidated statement of comprehensive income. Dividend and realized gains and losses upon sale of the available-for-sale securities are recognized as other income.

g)Accounts receivable and allowance for doubtful accounts

Accounts receivable mainly represents the amounts due from WVAS partners with whom the Group has entered into agreements for users to purchase the services of the Group and amounts due from offline events sponsors. An allowance for doubtful debts is provided based on an ageing analysis of accounts receivable balances, historical bad debt rates, repayment patterns and credit analysis. The Group also makes a specific allowance if there is evidence showing that the receivable is likely to be irrecoverable, and assesses the probability of recovery on an annual basis. Accounts receivable in the consolidated balance sheet were stated net of such provisions. The allowance for doubtful accounts was RMB110, RMBnil and RMB1,130 for the year ended December 31, 2012, 2013 and 2014, respectively.

h)Property and equipment

Property and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is provided on a straight-line basis over the following estimated useful lives:

	Estimated useful lives
Office building	30 years
Office building improvements	10 years
Computer and software	3 years
Furniture, fixture and other equipment	3 years
Motor vehicles	4 years
Leasehold improvements	Shorter of lease term or estimated useful lives of assets

Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of the property and equipment, are expensed as incurred. Gains and losses from the disposal of property and equipment are included in income from operations.

i)Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Group’s business combinations.

F-12

In accordance with FASB guidance for goodwill and other intangible assets, goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Group completes a two-step goodwill impairment test at each year end date. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value reporting unit over the amount assigned to the assets and liabilities. This allocation process is only performed for the purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value over the implied fair value of goodwill.

The Group did not incur any impairment loss on goodwill during any of the periods presented.

j)Intangible assets

Intangible assets consist of acquired intangible assets with finite lives as a result of the Group’s business combination and the acquired domain names, and are carried at cost less accumulated amortization. Amortization is computed using the straight-line method over the following estimated useful lives of the intangible assets:

	Estimated useful lives
Trademarks and domain names	10 years
Customer relationships	5 years
Source code	10 years

k)Impairment of long-lived assets and intangible assets

The carrying amount of long-lived assets and intangible assets are reviewed for impairment whenever events or changes in the circumstances indicate that the carrying value of an asset may not be recoverable. The Group assesses the recoverability of the long-lived assets and intangible assets by comparing the carrying amount of assets to the estimated future undiscounted cash flows expected to be generated by the assets. Such assets are considered to be impaired if the sum of the expected undiscounted cash flow is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets or intangible assets was recognized for any of the periods presented.

l)Investment in equity investee

Equity investment represents the Group’s investment in a private-owned company. For any equity investment that is not considered as debt security or equity security and that neither has readily determinable fair values nor is considered in-substance common stock, the cost method is used.

Under the cost method, the Group carries the investment at cost and recognizes income to the extent of dividends received from the distribution of the equity investee’s post-acquisition profits.

The Group continually reviews its investment in equity investee to determine whether a decline in fair value below the carrying value is other than temporary. The primary factors the Group considers in its determination are the length of time that the fair value of the investment is below the Group’s carrying value; the financial condition, operating performance and the prospects of the equity investee; and other company specific information such as recent financing rounds. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down to fair value. No impairment of investment in equity investee was recognized for the year ended December 31, 2014.

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m)Revenue recognition and deferred revenue

Revenue is recognized when persuasive evidence of an arrangement exists, service has been rendered, the price is fixed or determinable and collection is reasonably assured. Revenue is deferred until these criteria are met as described below.

Revenues presented in the consolidated statement of comprehensive income include revenues from online services, personalized matchmaking services, and events and other services.

Online services revenue

The Group offers two types of online services through its online platforms, including message exchanging services and value-added services. Users prepay for virtual currencies that can be used as consideration for the Group’s online services. The Group charges for message exchanging services when one registered user initiates contact with another registered user via the Group’s online platform, and either the sender or recipient may pay for the service. Subsequently, the Group does not charge for any message exchanges between the same two users. Based on the Group’s historical data, the exchange between two users on its online platform typically lasted only a few days. The Group believes that users place the most value on the initial connection, and that users are interested in further interactions after exchanging personal contact information to communicate with each other directly. The Group also offers value-added online services, including sending virtual gifts, improved search rankings and online chatting.

The Group has adopted two primary fee models for the online services: a pay-per-use model and a periodic subscription model. Online services offered under the pay-per-use model include improved search rankings for the duration of one day, message sending or receiving and sending virtual gifts. As the Group provides these services within a short period of time, revenue is recognized when the virtual currencies are used and services are rendered. If the communication patterns of the users change, the timing of the Group’s revenue recognition for these services may be impacted and revenue may be deferred and recognized over a longer period. The Group’s virtual currencies purchased by users that have yet to be used are initially recorded as deferred revenue.

Under the periodic subscription model, users pay a fixed subscription fee for certain services which are delivered over a predetermined subscription period. Online services offered under the subscription model include sending multiple messages a day, reading unlimited number of messages, improved search rankings for a period longer than a day, unlimited online chatting and premium user subscriptions. Fees for subscription services are collected upfront and initially recognized as deferred revenue, and revenue is recognized proportionately over the applicable subscription periods as services are rendered.

The Group’s virtual currencies can be purchased through the Group’s online platform, where the payment is collected through online payment platforms, or through the Group’s WVAS partners. The Group’s WVAS partners offer a payment method by charging services to the customer’s telephone bills, collecting payment from the users and remitting the cash to the Group after payment is collected. Due to the time lag between when the services are rendered and billing statements are provided by the WVAS partners, revenues from the Group’s virtual currencies sold through such channel is estimated based on the Group’s internal billing records and billing confirmations with the WVAS partners. The Group adjusts its revenue recognition for prior periods’ confirmation rates and prior periods’ discrepancies between internally estimated revenues and actual revenues confirmed by the WVAS partners. There were no significant difference between the Group’s estimates and the WVAS partners’ billing statements for all the periods presented.

Revenue from virtual currencies sold through the WVAS partners are recognized on a gross basis as the Group is considered the primary obligor in the arrangements. The Group is also responsible for designing, developing and implementing the online services, and bears credit risks associated with uncollectible fees. In addition, the Group determines the price and the WVAS partners earn only a fixed percentage of commission fees. The amounts attributed to the WVAS partners are determined pursuant to the arrangements between the Group and the WVAS partners, and are recognized as costs of revenues. Such cost of revenues amounted to RMB49,923, RMB61,881 and RMB65,997 for the years ended December 31, 2012, 2013 and 2014, respectively.

The Group also offers web-based games and mobile games under an item-based revenue model, where the basic game play functions are free of charge and players are charged for purchases of in-game virtual items or game points. Revenues of games business are included in online service revenue.

For web-based games, the Group cooperates with third-party game developers by entering into cooperation agreements with them. The web-based games designed, developed and hosted by these developers are made available to the players through the Group’s platforms. The Group views that the developers are primarily responsible for the operation of web-based games to the players. The Group generally collects payments from players in connection with the sale of in-game virtual items and remits certain agreed-upon percentages of the proceeds to the game developers and records revenue net of such remittances. Revenue is recognized when the in-game virtual items are consumed.

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For mobile games, the Group is primarily responsible for the operation and sells game points to players through third party mobile application stores. The mobile application stores remit the proceeds to the Group after deducting certain agreed-upon percentages of commission fees. Revenue from the sale of game points is recorded gross of the commission fees paid to mobile application stores and is recognized when the game points are consumed.

Personalized matchmaking services revenue

The Group provides personalized matchmaking services to individual users, which generally consist of unlimited access to certain online services, tickets to a number of events, personalized communications, provision of detailed background checks, dating and relationship consultation and advice and search services provided by the Group’s customer service representatives in a specified contractual period. The Group provides various personalized matchmaking services throughout the contract period on an as-needed basis. When the Group enters into a personalized matchmaking service contract with an individual user, the Group is unable to determine or estimate the volume of each separate service to be provided to the particular user. Different types of services under such personalized bundled contracts are to be provided gradually over the contract period, and as such, the Group accounts for the personalized matchmaking services as a single unit of accounting on a contract basis. Starting from 2013, the Group entered into business arrangements with matchmaking service agencies for providing personalized matchmaking services in the PRC. The Group grants matchmaking service agencies limited rights to use the Group’s brand, trademark and certain resources under the direction of the Group in accordance with the agency agreements. The Group collects upfront payments from the users and remits the commission fees to the matchmaking service agencies at the pre-determined rates pursuant to the agreements between the Group and the matchmaking service agencies. The Group is responsible for the determination of the service scope and price, and the signing of the service agreements and the collection of service fees from customers directly. Revenue from users obtained through matchmaking service agencies are recognized on a gross basis as the Group is considered the primary obligor in the service arrangements.

Payments for personalized matchmaking services are collected upfront and initially recorded as deferred revenue, and revenue is recognized ratably over the contract service period. In addition, there are training fees charged upfront to the matchmaking service agencies, which are recognized as revenue when the training services are rendered.

Contracts for personalized matchmaking services may be terminated at any time at the user’s sole discretion during the contractual period. It is the Group’s policy to refund 80% of the contract payment to the user only if termination takes place within the initial seven days. The Group recognizes all deferred revenue remaining, after deducting the cash refund, if any, from the contract at the time of termination.

Events and other services revenue

The Group earns revenue from organizing and hosting events, including speed-dating, dance parties, and other social events for its users. Speed dating is an organized form of matchmaking that focuses on meeting multiple potential romantic partners over the course of a single event. Tickets are generally sold at the events, and revenue is recognized upon the conclusion of the events when services have been rendered. For certain events where tickets are prepaid by the users, prepaid fees are initially recorded as deferred revenue and revenue is recognized upon the completion of the events. Events services revenue also include the revenue from event sponsorship arrangements whereby third-party companies enter into agreements with the Group to sponsor a particular offline event and the revenue from event sponsorship arrangements are recognized upon the completion of the sponsored event.

Other services revenue mainly represents revenues from online advertising. Revenue from online advertising is principally derived from advertising arrangements that allow advertisers to place advertisements on particular areas of the Group’s websites, in particular formats and over a particular period of time. The Group enters into advertising contracts which are signed to establish the fixed price for the advertising arrangements to be provided, and payment is collected upfront and initially recognized as deferred revenue. Revenues from advertising-related arrangements are recognized on a straight-line basis over the contractual period.

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n)Customer loyalty program

Registered users earned loyalty points based on their activities on the Group’s platform and/or purchase of online services, which could be used to redeem online services once a minimum number of points had been accumulated. The Group considered loyalty points awarded for the purchase of online services to be part of its revenue generating activities, and such arrangements were considered to have multiple elements. Under the applicable guidance, total consideration was allocated to the purchased services and loyalty points based on the relative selling price of the purchased services and redeemable services. In determining the best estimated selling price of each loyalty point, the Group considered the selling price of the underlying services if they were not redeemed using loyalty points and the average number of loyalty points needed to redeem each type of service. Consideration allocated to the loyalty points was initially recorded as deferred revenue, and revenue was recognized when the points were redeemed and services were rendered. In 2013, the Group suspended the customer loyalty program. All the loyalty points expired in 2013 and the Group recognized the deferred revenue accordingly.

For the years ended December 31, 2012, 2013 and 2014, revenue recognized from loyalty points amounted to RMBnil, RMB4,917 and RMBnil, respectively. All the loyalty points expired in 2013 and the deferred revenue balance in relation to the customer loyalty program amounted to RMBnil as of December 31, 2013 and thereafter.

o)Cost of revenues

Cost of revenues primarily consists of commission fees paid to the WVAS partners for money collection, salaries and wages, network costs, depreciation of property and equipment, rental expenses of premises and facilities and commission fees paid to personalized matchmaking service agencies.

p)Share-based compensation

The Company grants share options and restricted shares to eligible employees and directors under a share incentive plan. The awards are measured at the grant date fair value and are recognized as an expense using the graded vesting method, net of estimated forfeiture rate. The Company recognizes awards with service condition terms only over the requisite service period, which is generally the vesting period.

q)Income taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current year. Deferred tax liabilities and assets for the future tax consequences of events are also recognized in the Group’s financial statements or tax returns.

Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized.

The PRC tax regulations impose a 10% withholding income tax for dividends distributed by foreign invested enterprises to their immediate holding companies outside the PRC. A lower withholding tax rate will be applied if there is a tax treaty arrangement between mainland China and the jurisdiction of the foreign holding company. A holding company in Hong Kong, for example, will be subject to a 5% withholding tax rate under the Arrangement Between the PRC and Hong Kong on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital if such holding company is considered a non-PRC resident enterprise and holds at least 25% of the equity interests in the PRC foreign invested enterprise distributing the dividends, subject to approval of the PRC local tax authority. However, if the Hong Kong holding company is not considered to be the beneficial owner of such dividends under applicable PRC tax regulations, such dividend will remain subject to a withholding tax rate of 10%.

The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement of comprehensive income. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2012, 2013 and 2014. As of December 31, 2014, the Group did not have any significant unrecognized uncertain tax positions.

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r)Employee benefit expenses

All eligible employees of the Group are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group has no further payment obligations once the contributions have been paid.

The Group recorded employee benefit expenses of RMB14,005, RMB17,568 and RMB20,553 for the years ended December 31, 2012 and 2013 and 2014, respectively.

s)Statutory reserves

The Group’s subsidiaries, VIEs and VIE’s subsidiary established in the PRC are required to make appropriations to certain non-distributable reserve funds.

In accordance with the laws applicable to China’s Foreign Investment Enterprises, the Group’s subsidiaries registered as wholly-owned foreign enterprise has to make appropriations from its after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by the Ministry of Finance of the People’s Republic of China (“PRC GAAP”)) to reserve funds including general reserve fund, and staff bonus and welfare fund.

The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the company. Appropriation to the staff bonus and welfare fund is at the company’s discretion.

In addition, in accordance with the China Company Laws, the VIEs of the Company registered as a PRC domestic company must make appropriations from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund and a discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits as determined under PRC GAAP. Appropriation is not required if the surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company.

The use of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increases the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to staff and for the collective welfare of employees. All these reserves are not allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation.

For the years ended December 31, 2012, 2013 and 2014, RMB3,710, RMB472 and RMB129 were appropriated to the statutory reserves, respectively.

t)Research and development costs

Research and development costs include expenses incurred by the Company to develop, maintain and manage the Company’s platforms. These expenses are mainly comprised of salaries, employee benefits and other headcount-related costs associated with the research and development department. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair and maintenance of the existing platforms. Costs incurred in the development phase are capitalized and amortized over the estimated product life.

During the periods presented, the amount of costs qualifying for capitalization was not significant and as a result, the Group expensed all research and development costs as incurred.

u)Advertising expenses

Advertising expenses, which generally reflect the cost of promotions to create or stimulate a positive image of the Group or a desire to obtain the Group’s services, are expensed as incurred. Advertising costs included in selling and marketing expense were RMB69,966, RMB71,498 and RMB105,636 for the years ended December 31, 2012, 2013 and 2014, respectively.

F-17

v)Operating lease

Leases where substantially all the risks and rewards of ownership of the assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of comprehensive income on a straight line basis over the lease periods.

w)Government subsidies

Government subsidies represent discretionary cash subsidies granted by the local government to encourage the development of certain enterprises that are established in the local economic region. The cash subsidies are recognized as other income when there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

x)Foreign currency translation

The Group uses the RMB as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in the British Virgin Islands and Hong Kong is the US$, while the functional currency of the Group’s other subsidiaries, VIEs and VIE’s subsidiary incorporated and operated in the PRC is the RMB.

In the consolidated financial statements, the financial information of the Company and its subsidiaries which use US$ as their functional currency, has been translated into RMB. Assets and liabilities are translated from each subsidiary’s functional currency at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated using the average rate for the year. Gains and losses resulting from foreign currency translation to reporting currency are recorded in accumulated other comprehensive income in the consolidated statements of comprehensive income for the years presented.

y)Net income per share and per American Depository Share (“ADS”)

Basic net income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the year. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of non-vested restricted shares and shares issuable upon the exercise of stock options (using the treasury stock method). Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such shares would be anti-dilutive.

Basic and diluted net income per ADS is computed based on net income and the corresponding basic and diluted number of ADSs, assuming that, during each period presented, every two ADSs represent three ordinary shares of the Company.

z)Comprehensive income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding those resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, consists of the accumulated foreign currency translation adjustments.

aa)Recent accounting pronouncements

On May 28, 2014, the FASB and IASB issued their converged standard on the recognition of revenue from contracts with customers. The standard is intended to improve the financial reporting of revenue and improve comparability of the top line in financial statements globally. The FASB is amending the FASB Accounting Standards Codification and creating a new Topic 606, Revenue from Contracts with Customers, to supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the amendments supersede some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. For a public entity, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is currently evaluating the impact on its consolidated financial statements of adopting this guidance.

F-18

In June 2014, under ASC 718, Compensation—Stock Compensation, the FASB issued Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. These amendments apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. That is the case when an employee is eligible to retire or otherwise terminate employment before the end of the period in which a performance target could be achieved and still be eligible to vest in the award if and when the performance target is achieved. For all entities, the amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group is currently evaluating the impact on its consolidated financial statements of adopting this guidance.

In August 2014, the FASB issued Presentation of Financial Statements — Going Concern. This standard requires management to evaluate for each annual and interim reporting period whether it is probable that the reporting entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued. If the entity is in such a position, the standard provides for certain disclosures depending on whether or not the entity will be able to successfully mitigate its going concern status. This guidance is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. The Group does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

4.Concentration, Credit and Other Risks

a)PRC Regulations

The PRC market in which the Group operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Group to conduct online services through contractual arrangements in the PRC since the industry remains highly regulated. The Group conducts all of its operations in China through its VIEs and VIE’s subsidiary, which the Group consolidates as a result of a series of contractual arrangements enacted among Beijing Miyuan, the VIEs and  their legal shareholders. The Group believes that the contractual arrangements among Beijing Miyuan, the VIEs and their legal shareholders are in compliance with PRC law and are legally enforceable. If the VIEs or their legal shareholders fail to perform their obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, the Group will have to enforce its rights under these contracts through the operations of PRC law and courts. However, uncertainties in the PRC legal system could limit the Group’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If the Group had direct ownership of the VIEs, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Group relies on the VIEs and their legal shareholders’ performance of their contractual obligations to exercise effective control. In addition, the exclusive technology licenses and service agreements with the VIEs and VIE’s subsidiary, which first expire on the tenth anniversary of the agreement signing date, is subject to subsidiaries’ unilateral termination right. In general, neither the VIEs nor their legal shareholders may terminate the contracts prior to the expiration date.

Although the PRC has, since 1978, implemented a wide range of market-oriented economic reforms, continued reforms and progress towards a full market-oriented economy are uncertain. In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like the Company, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. Consequently, such uncertainties may limit the Group’s ability to enforce its contractual arrangements with the VIEs. Although the Group believes the contractual arrangements are in compliance with current PRC regulations, there can be no assurance that the PRC government would agree that these contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws, rules and regulations governing the validity of these contractual arrangements are uncertain and the relevant government authorities have broad discretion in interpreting these laws, rules and regulations. Such uncertainties on the compliance with PRC laws of the contractual arrangements may adversely affect the Group’s ability to consolidate the VIEs. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Group’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Group’s ability to conduct business in the PRC.

F-19

On January 19, 2015, the Ministry of Commerce of the PRC, or (the “MOFCOM”) released on its website for public comment a proposed PRC law (the “Draft FIE Law”) that appears to include VIEs within the scope of entities that could be considered to be foreign invested enterprises (or “FIEs”) that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control.” If the Draft FIE Law is passed by the People’s Congress of the PRC and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed to reach the Group’s VIE arrangements, and as a result the Group’s VIEs could become explicitly subject to the current restrictions on foreign investment in certain categories of industry. The Draft FIE Law includes provisions that would exempt from the definition of foreign invested enterprises entities where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law does not make clear how “control” would be determined for such purpose, and is silent as to what type of enforcement action might be taken against existing VIEs that operate in restricted industries and are not controlled by entities organized under PRC law or individuals who are PRC citizens. If a finding were made by PRC authorities, under existing law and regulations or under the Draft FIE Law if it becomes effective, that the Group’s operation of certain of its operations and businesses through VIEs, regulatory authorities with jurisdiction over the licensing and operation of such operations and businesses would have broad discretion in dealing with such a violation, including levying fines, confiscating the Group’s income, revoking the business or operating licenses of the affected businesses, requiring the Group to restructure its ownership structure or operations, or requiring the Group to discontinue all or any portion of its operations. Any of these actions could cause significant disruption to the Group’s business operations, and have a severe adverse impact on the Group’s cash flows, financial position and operating performance.

The following combined financial information of the Group’s VIEs and VIE’s subsidiary, as applicable, were included in the accompanying consolidated financial statements of the Group:

	As of December 31,
	2013	2014
	RMB	RMB
Total assets	501,281	633,177
Total liabilities	312,572	409,772
Payable to third parties	189,803	270,533
Payable to Group entities	122,769	139,239

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Net revenue	411,084	492,799	614,239
Net income	23,038	61,608	25,133
Inter-company service fees paid/payable	43,446	9,278	11,615

	For the year ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Net cash provided by operating activities	54,966		151,318		90,925
Net cash used in investing activities	(67,544	)	(87,916	)	(97,104	)
Effect of exchange rate changes on cash and cash equivalents	(11	)	(180	)	134
Net (decrease)/increase in cash and cash equivalents	(12,589	)	63,222		(6,045	)

The total assets of the consolidated VIEs and VIE’s subsidiary were mainly comprised of cash and cash equivalents, short-term deposits, accounts receivable, prepayments and other current assets, property and equipment, investment in equity investee, intangible assets and goodwill. The total liabilities of the consolidated VIEs and VIE’s subsidiary were mainly comprised of deferred revenue and accrued expenses and other current liabilities.

The revenue-producing assets of VIEs mainly include property and equipment, intangible assets and goodwill. There were also unrecognized revenue-producing assets including intellectual property such as patents and licenses, and self-developed software which were expensed as incurred as the amounts were not significant. The carrying values of property and equipment, intangible assets and goodwill of VIEs as of December 31, 2013 and 2014 were as follows:

	As of December 31,
	2013	2014
	RMB	RMB
Property and equipment, net	99,296	91,208
Intangible assets, net	4,275	3,610
Goodwill	789	789

All of the Group’s revenues for the periods presented were contributed by the VIEs and VIE’s subsidiary.

F-20

b)Concentration of credit risks

Financial instruments that potentially subject the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, short-term deposits, available-for-sale securities and accounts receivable. As of December 31, 2013 and 2014, the Group’s cash and cash equivalents and short-term deposits were held by financial institutions located in the PRC and Hong Kong that management believes are of high-credit ratings and quality. Available-for-sale securities were placed with a financial institution and have original maturities of one month. Accordingly, management determined that the Group’s available-for-sale securities are exposed to minimal credit risks. Accounts receivable are typically unsecured and are mainly derived from revenues collected by WVAS partners on behalf of the Group in the PRC and amounts due from sponsors who sponsored the Group’s offline events. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Group performs on the WVAS partners and offline events sponsors and its ongoing monitoring of outstanding balances.

c)Foreign currency risk

A majority of the Group’s operating transactions are denominated in RMB and a significant portion of the Group’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Group in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance.

5.Fair Value Measurements

The Group’s financial instruments include cash equivalents, short-term deposits, available-for-sale securities, accounts receivables, prepaid expenses and other current assets, other non-current assets, accounts payable, accrued expenses and other current liabilities, and accrued expenses and other liabilities, non-current portion. The carrying value of the Company’s short-term financial instruments approximates their fair value because of their short maturities. The carrying value of other non-current assets and accrued expenses and other liabilities, non-current portion approximates their fair value because the change in fair value after considering discount rate is considered immaterial.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price). It establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Valuation techniques used to measure fair value shall maximize the use of observable inputs. The hierarchy is as follows:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Group engaged independent valuation specialists to assist them in determining the fair value of equity issued (including share options) and the goodwill and intangible assets arising from the Group’s business combination.

F-21

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Following is a description of the valuation techniques that the Group uses to measure the fair value of assets and liabilities that the Group measured and reported on its consolidated balance sheet at fair value on a recurring basis.

The following table sets forth the financial instruments, measured at fair value, by level within the fair value hierarchy:

		Fair value measurements at reporting date using
		Quoted prices in
	Total fair value	active market	Significant other	Significant
	and carrying value	for identical	observable	unobservable
	on balance sheet	assets (Level 1)	inputs (Level 2)	inputs (Level 3)
	RMB	RMB	RMB	RMB
As of December 31, 2013
Cash equivalents	232,458	—	232,458	—
Short-term deposits	336,299	—	336,299	—
Available-for-sale securities	5,233	—	5,233	—
As of December 31, 2014
Cash equivalents	196,810	—	196,810	—
Short-term deposits	239,466	—	239,466	—
Available-for-sale securities	15,715	—	15,715	—

Cash equivalents and short-term deposits: The Group’s cash equivalents and short term deposits mainly consist of time deposits placed with banks. The Group measures cash equivalents and short term deposits at fair value based on the pervasive interest rates in the market, which are also the interest rates as stated in the contracts with the banks. The Group classifies the valuation techniques that use the pervasive interest rates input as Level 2 of fair value measurements. Generally there are no quoted prices in active markets for identical time deposits at the reporting date. In order to determine the fair value, the Group must use the discounted cash flow method and observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Available-for-sale securities: The Group measures available-for-sale securities at fair value. To estimate the fair value of investments in financial instruments with a variable interest rate indexed to the performance of underlying assets, the Group refers to the quoted rate of return provided by the investment company at the end of each period. The Group classifies the valuation techniques as Level 2 of fair value measurement.

The following are other financial instruments not measured at fair value in the balance sheets but for which the fair value is estimated for disclosure purposes.

Short-term receivables and payables: Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value due to their short term nature. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value due to their short term nature. The Group estimates fair values of short-term receivables and payables and classifies the valuation technique as Level 3 of fair value measurement, as it uses estimated cash flow input which is unobservable in the market.

Non-current assets and non-current liabilities : Non-current assets of receivables for rental deposits is a financial asset with carrying value that approximate fair value due to the change in fair value, after considering the discount rate, being immaterial. Accrued expenses and other liabilities, non-current portion is a financial liability with carrying value that approximate fair value due to the change in fair value, after considering the discount rate, being immaterial. The Group estimated fair values of non-current assets and non-current liabilities using the discounted cash flow method. The Group classifies the valuation technique as Level 3 of fair value measurement, as it uses estimated cash flow input which is unobservable in the market.

F-22

6.Accounts Receivable, net

The following summarized the Group’s accounts receivable, net as of December 31, 2013 and 2014:

	As of December 31,
	2013	2014
	RMB	RMB
Accounts receivable	33,987	38,875
Less: Allowance for doubtful accounts	—	(1,130	)
Accounts receivable, net	33,987	37,745

The following summarized the changes in allowance for doubtful accounts:

	2013		2014
	RMB		RMB
Balance as of January 1	110		—
Provision of bad debt	—		2,364
Write-off of bad debt	(110	)	(1,234	)
Balance as of December 31	—		1,130

7.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	As of December 31,
	2013	2014
	RMB	RMB
Prepaid commission to matchmaking service agencies	6,172	45,915
Prepaid expenses-other	6,659	7,235
Advances to employees	2,761	4,014
Interest receivables	4,782	2,417
Rental and other deposits	2,781	3,653
Inventory	—	1,553
Others	540	1,714
	23,695	66,501

8.Investment in equity investee

In October 2014, Beijing HQS completed an acquisition of shares in Wuhan Didi Network Technology Co., Ltd. (“Wuhan Didi”), a developer of mobile applications in the PRC, for cash consideration of approximately RMB11.0 million. Beijing HQS holds 20% of economic interests and can exercise significant influence after the completion of this acquisition. The investment is accounted for under the cost method given that such shares contain certain terms such as liquidation preferences over ordinary shares. As a result, the shares are not considered in-substance common stock and are accounted for under the cost method. The fair value of this investment approximated to its carrying value as of December 31, 2014.

F-23

9.Property and Equipment, net

Property and equipment, net, consisted of the following:

	As of December 31,
	2013		2014
	RMB		RMB
Office buildings	77,797		77,797
Office buildings improvements	3,884		3,948
Computer and software	54,271		56,942
Furniture, fixture and other equipment	4,544		4,960
Motor vehicles	407		407
Leasehold improvements	3,296		4,254
	144,199		148,308
Less: accumulated depreciation and amortization	(44,715	)	(56,614	)
Property and equipment, net	99,484		91,694

For the years ended December 31, 2012, 2013 and 2014, depreciation and amortization expenses for the property and equipment amount to RMB13,264, RMB15,576 and RMB13,716, respectively.

10.Business Combination

In order to further expand its online business, on December 10, 2012, the Group acquired certain assets associated with the website of www.juedui100.com and www.juedui100.com.cn from Beijing Juedui 100 Network Technology Co., Ltd. (the “Juedui 100”) which operates an online platform for providing online dating services. Pursuant to the acquisition agreements, the total purchase consideration was RMB5,500 in cash. In accordance with the relevant accounting guidance, the acquired assets should be considered a business as the assets include both inputs and processes.

The Group accounted for the acquisition as a business combination and the fair value of the assets acquired by the Group was evaluated on the acquisition date. The recognized amounts of the identifiable assets were as follows:

	As of December 10, 2012
	RMB
Identifiable intangible assets:
Brand name	2,141
Customer relationships	1,637
Source code	933
Identifiable assets acquired	4,711
Goodwill	789
Cash consideration	5,500

The excess of purchase price over identifiable assets acquired was recorded as goodwill, and attributed to the Group’s online services segment. Goodwill primarily represents the expected synergies from combining the online platform operations of the Group with the business acquired, which are expected to be complementary to each other. Goodwill is not deductible for tax purposes.

The acquired identifiable intangible assets were valued by various approaches, including the income approach and the cost approach, as appropriate. The Group engaged independent valuation specialists to assist them in determining the fair value of the identifiable intangible assets.

Acquisition-related costs incurred for the acquisition were not material and have been expensed as incurred in general and administrative expenses.

Prior to the acquisition, Juedui100 did not prepare its financial statements in accordance with U.S. GAAP and there was no standalone financial information available for the acquired business. Accordingly, the Group did not present the pro forma financial information with respect to the results of operations of the acquired business considering the financial impact of the acquired business was not material.

11.Intangible assets, net

The following table summarizes the Company’s intangible assets, net:

	As of December 31,
	2013		2014
	RMB		RMB
Brand name	2,141		2,141
Customer relationships	1,637		1,637
Source code	933		933
Domain names	305		305
	5,016		5,016
Less: accumulated amortization	(741	)	(1,406	)
Intangible assets, net	4,275		3,610

For the years ended December 31, 2012, 2013 and 2014, amortization expenses for the above intangible assets amounted to RMB142, RMB599 and RMB665, respectively.

As of December 31, 2014, amortization expenses for future periods are estimated as follows:

For the year ended December 31,	Amortization expenses
	RMB
2015	665
2016	665
2017	612
2018	338
2019	338
Thereafter	992
Total	3,610

During the years ended December 31, 2012, 2013 and 2014, no impairment of intangible assets was recognized by the Group.

F-24

12.Goodwill

Goodwill is attributable to the Group’s online services segment under which significant synergies are expected to arise after the Group’s acquisition.

The Company performed a goodwill impairment test as of year end date and concluded that no impairment should be recognized as of December 31, 2013 and 2014. No reasonable change to the assumptions would lead to an impairment charge.

13.Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:

	As of December 31,
	2013	2014
	RMB	RMB
Accrued salaries and welfare	19,740	17,964
Accrued advertising expenses	2,371	2,388
Accrued network support expenses	1,908	1,801
Business and other tax payable	3,304	4,093
Professional and other service fees	6,556	9,262
Deposits received from matchmaking service agencies	2,850	8,980
Others	5,616	6,652
Balance as at December 31	42,345	51,140
Less: Current portion	39,615	45,490
Non-current portion	2,730	5,650

14.Taxation

a)Business Tax, Value Added Tax and Surcharges

The Group’s PRC operations are subject to PRC business tax (“Business Tax”) and surcharges at rates ranging from 0% to 8.60%, depending on the nature of the service revenue and the geographical region. Business Tax and surcharges is calculated by multiplying the applicable tax rate by gross revenue, and is recognized when the revenue is recognized. The Group recognized RMB14,242, RMB17,090 and RMB16,345 of business tax and surcharges, as a reduction of revenues, for the years ended December 31, 2012, 2013 and 2014, respectively.

Effective from January 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation launched a Business Tax to Value Added Tax (“VAT”) Transformation Pilot Program (the “Pilot Program”) for certain industries. VAT payable on goods sold or taxable labor services provided by a general VAT taxpayer for a taxable period is the net balance of the output VAT for the period after crediting the input VAT for the period. Hence, the amount of VAT payable does not result directly from output VAT generated from goods sold or taxable labor services provided.

With the adoption of the Pilot Program, Shanghai Miyuan, Beijing Miyuan, Beijing Aizhenxin and majority businesses of Shanghai HQS ceased to be subject to Business Tax. Shanghai Miyuan was subject to VAT at a rate of 3% from January 2012 to January 2013 and at a rate of 6% starting from February 2013. Beijing Miyuan was subject to VAT at a rate of 3% from September 2012 to December 2013 and at a rate of 6% starting from January 2014. Beijing Aizhenxin is subject to VAT at a rate of 3% starting from September 2012. Shanghai HQS’s online services, personalized matchmaking services and advertising services were subject to VAT at a rate of 6% starting from June 2014. Jiayuan Shanghai Center, Shanghai HQS’s events business, Shanghai HQS’s Beijing branch, Beijing HQS and Xique continued to be subject to Business Tax.

F-25

b)Income tax

The Cayman Islands and the British Virgin Islands

Under the common tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

Under the current laws of the British Virgin Islands, BVI Company is a tax-exempted company.

Hong Kong

Jiayuan Hong Kong is not subject to Hong Kong profits tax on foreign-sourced income, dividends and capital gains. As an entity incorporated in Hong Kong, Jiayuan Hong Kong was subject to 16.5% income tax for the years ended December 31, 2012, 2013 and 2014 on its taxable profits generated from operations in Hong Kong. Payment of dividends is not subject to withholding tax in Hong Kong.

The PRC

The Company’s subsidiaries and VIEs in China are governed by the Enterprise Income Tax Law (“EIT Law”), which became effective on January 1, 2008. Pursuant to the EIT Law and its implementation rules, enterprises in China are generally subjected to tax at a statutory rate of 25%. Certified High and New Technology Enterprises (“HNTE”) are entitled to a favorable statutory tax rate of 15%. Qualified software enterprises can enjoy an income tax exemption for two years beginning with their first profitable year and a 50% tax reduction to the applicable tax rate for the subsequent three years. Qualified key software enterprises are entitled to a favorable statutory tax rate of 10%.

The Group’s PRC entities accrued for corporate income tax as follows:

·Shanghai Miyuan was subject to 25% EIT in 2010. In 2011, Shanghai Miyuan was qualified as a software enterprise under which it is entitled to income tax exemption for the fiscal years 2011 and 2012 and a preferential tax rate of 12.5% from fiscal years 2013 through 2015. However, as Shanghai Miyuan was not continually qualified as a software enterprise in 2014, it was subject to 25% EIT in 2014 and thereafter.

·Shanghai HQS was subject to 15% EIT as a result of HNTE status from 2010 to 2012. In February 2014, Shanghai HQS was qualified as a key software enterprise and was subject to 10% EIT for 2013 and 2014. In April 2014, Shanghai HQS completed the process for the renewal of HNTE status and was continually entitled to a preferential income tax rate of 15% for 2013 to 2015. As Shanghai HQS is eligible for both preferential rates of 10% and 15% in 2013 and 2014, the Company elects to enjoy the rate of 10% for 2013 and 2014.

·In 2014, Beijing Miyuan was qualified as a software enterprise under which it is entitled to income tax exemption for two years beginning from its first year with taxable income and a 50% tax reduction to a 12.5% income tax rate for the subsequent three years. Beijing Miyuan incurred taxable loss in 2014.

·Beijing HQS, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center were subject to 25% EIT from 2012 to 2014.

In addition, under the EIT Law, effective from January 1, 2008, dividends, interests, rent, royalties and gains on transfers of property payable by a foreign-invested enterprise in the PRC to its foreign investor who is a non-resident enterprise are subject to withholding tax of 10%, unless such non-resident enterprise’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a reduced rate of withholding tax. The withholding tax rate is 5% for the parent company incorporated in certain qualified jurisdictions if the parent company is the beneficial owner of the dividend and approved by the PRC tax authority to enjoy the preferential tax benefit. This withholding tax regulation imposed on the dividend income received from the Group’s PRC subsidiaries reduces the Group’s net income. On February 22, 2008, the Ministry of Finance and State Tax Bureau jointly issued a circular which stated that for foreign invested enterprises, all profits accumulated up to December 31, 2007 are exempted from withholding tax when they are distributed to foreign investors.

F-26

The EIT Law also provides that an enterprise established under the laws of foreign countries or regions but whose “de facto management body” is located in the PRC would be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementation Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on an assessment of surrounding facts and circumstances, the Group does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should the Company and its overseas subsidiaries be treated as a resident enterprise for PRC tax purposes, they will be subject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to January 1, 2008.

The Company’s subsidiaries had not declared any dividend to their respective parent companies and had determined that it had no plan to declare or pay any dividends to the parent companies out of the accumulated undistributed earnings as of December 31, 2012. Accordingly, no deferred income tax was accrued and required to be accrued as of December 31, 2012.

On May 16, 2013, the Board of Directors of the Company declared a special cash dividend of US$0.26 per ADS, payable to record holders of the Company’s ordinary shares at the close of business on June 5, 2013. The special dividend of US$7,800 was paid out of reserves to the shareholders on June 18, 2013. On September 29, 2014, the Board of Directors of the Company further declared a special cash dividend of US$0.67 per ADS, payable to record holders of the Company’s ordinary shares at the close of business on October 15, 2014. The special dividend of US$19,767 was paid out of reserves to the shareholders on October 27, 2014 and October 29, 2014.  As the Company assessed that it does not meet the criteria for being a tax resident enterprise in the PRC in accordance with Chinese EIT law and regulations, no withholding tax was withheld on behalf of the Company’s shareholders.

In addition, pursuant to the annual dividend policy which was approved by the Company’s board of directors on May 6, 2013, the Company expects to pay annual dividends with an aggregate amount of up to 60% of the Group’s annual net income before share-based compensation expenses.  Accordingly, the Group assessed that only a portion of the net income of the PRC entities for the year ended December 31, 2013 and thereafter will be reinvested indefinitely. As a result, deferred tax liabilities of RMB6,517 were recorded as of December 31, 2014 for the accumulated earnings expected to be distributed as cash dividends from the Group’s PRC entities to the Group’s overseas entities.

The undistributed earnings held by the Group’s PRC entities as of December 31, 2013 and 2014 were RMB219,876 and RMB262,568, respectively. An estimated PRC withholding taxes of RMB21,988 and RMB26,257 would be due if all the earnings were remitted as dividends as of December 31, 2013 and 2014, respectively.

Composition of income tax expenses

The current and deferred portions of income tax expenses included in the Group’s consolidated statements of comprehensive income are as follows:

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Current tax expenses	8,753	9,520	6,434
Deferred taxation	474	3,533	(3,427	)
Income tax expenses	9,227	13,053	3,007

F-27

Reconciliation of the differences between the PRC statutory EIT rate of 25% and the Group’s effective tax rate is as follows:

	For the year ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Statutory EIT rate	25.0	%	25.0	%	25.0	%
Effect of non-deductible expenses	4.9	%	2.6	%	7.9	%
Effect of lower tax rates in other jurisdictions	0.3	%	(0.8	)%	0.3	%
Effect of preferential tax treatments	(19.2	)%	(15.0	)%	(19.3	)%
Tax incentives for research and development expenses (i)	(3.1	)%	(3.9	)%	(7.2	)%
Withholding income tax for dividends	—		6.0	%	8.3	%
Changes in valuation allowance:	5.6	%	3.1	%	(2.0	)%
- Unrecognized tax losses	1.7	%	1.7	%	1.8	%
- Accrued salaries and other expenses	0.2	%	—		(1.2	)%
- Advertising expenses	3.7	%	1.4	%	(3.8	)%
- Doubtful accounts	—		—		1.2	%
Effective income tax rate	13.5	%	17.0	%	13.0	%

(i)  The Group obtained a tax incentive relating to research and development expense of one of its VIEs in the PRC. Under such tax incentive rule, the Group may claim an additional tax deduction amounting to 50% of the research and development expenses incurred in a year.

The effect of the preferential tax treatments available to the Group is as follows.

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Preferential tax treatments impact to net income to ordinary shareholders	15,201	14,498	6,125
Per share effect, basic	0.33	0.32	0.14
Per share effect, diluted	0.32	0.32	0.13

F-28

Deferred tax assets and liabilities

Deferred taxes are measured using the enacted tax rates for the periods in which they are expected to be reversed. Significant components of the Group’s deferred tax assets and liabilities are as follows:

	As of December 31,
	2013		2014
	RMB		RMB
Deferred tax assets, current
Net operating loss carry forwards	4,365		6,565
Accrued salaries and other expenses	3,391		3,329
Advertising expenses	15,214		18,799
Government subsidies	333		169
Other	188		616
Total deferred tax assets, current	23,491		29,478
Deferred tax assets, non-current	—		—
Total deferred tax assets	23,491		29,478
Less: valuation allowance
Net operating loss carry forwards	(4,365	)	(4,667	)
Accrued salaries and other expenses	(284	)	—
Advertising expenses	(15,214	)	(15,448	)
Other	—		(381	)
Total valuation allowance	(19,863	)	(20,496	)
Net deferred tax assets	3,628		8,982
Deferred tax liabilities, non-current
Withholding income tax for dividends	4,590		6,517

The Group had net operating loss carry forwards from certain subsidiaries, VIEs and VIE’s subsidiary amounting to RMB34,217 as of December 31, 2014, of which RMB1,983 will expire on December 31, 2015, RMB6,392 will expire on December 31, 2016, RMB3,522 will expire on December 31, 2017, RMB5,043 will expire on December 31, 2018 and RMB16,204 will expire on December 31, 2019.

The Group evaluates a variety of factors in determining the amount of the valuation allowance, including the Group’s operating history, accumulated deficit, existence of taxable temporary differences and reversal periods.

In addition, pursuant to the EIT Law, the deductible advertising expenses should be no more than 15% of the revenues as determined under PRC GAAP and the excess amount could be carried forward to the following years. As the Group expects certain excess amount of advertising expenses incurred by shanghai HQS in previous years could be further deductible in 2015, the Group recognized the deferred tax assets for such amount. Other than that, the Group expects the deferred tax asset in relation to the additional excess amount of advertising expenses is not realizable in the foreseeable future, accordingly, full valuation allowance is provided. The following table shows the movements of valuation allowance for the years presented:

	Years Ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Balance at beginning of the year	(13,652	)	(17,315	)	(19,863	)
Change in valuation allowance	(3,663	)	(2,548	)	(633	)
Balance at end of the year	(17,315	)	(19,863	)	(20,496	)

F-29

15.Ordinary Shares and Treasury Shares

As of December 31, 2014, the Company was authorized to issue 100,000,000 ordinary shares, at par value of US$0.001 per share, and 49,030,944 and 49,930,944 ordinary shares were issued as of December 31, 2013 and 2014, respectively.

As of December 31, 2014, 592,097 ordinary shares were issued to a depository and the sole purpose of such depository is to issue ADSs upon the exercise of options granted pursuant to the 2007 Share Incentive Plan (the “Plan”). These ordinary shares were included in issued and outstanding shares on the Group’s balance sheet and statement of changes in shareholders’ equity as of and for the year ended December 31, 2014 although these shares and the related ADSs were not issued to any option holders. The shares issued and held with the depository do not have any shareholder rights and do not have rights to any dividends if and when declared by the Company. Accordingly, these shares held with the depository are accounted for as if they were treasury shares.

In December 2011, the Board of Directors of the Company authorized a share repurchase plan, pursuant to which the Company was authorized to repurchase its own issued and outstanding ADSs up to an aggregate value of US$10,000 from the open market from time to time within one year. In December 2012, the Board of Directors approved another US$10,000 share repurchase plan to authorize the Company to repurchase its own issued and outstanding ADSs from the open market from time to time within one year (“2013 repurchase program”). In November 2013, the Board of Directors approved a twelve-month extension of the 2013 repurchase program. The share repurchase plans do not require the Company to acquire a specific number of shares.

During the year ended December 31, 2012, 2013 and 2014, the Company repurchased 2,004,526 ADSs, 931,593 ADSs and 776,341 ADSs for total consideration of approximately US$10,076, US$5,359 and US$4,287 from the open market, respectively. The ordinary shares representing the repurchased ADS are recorded as treasury shares at purchase cost at the time of repurchase. In 2012, 258,450 ordinary shares were cancelled while in 2013 and 2014, nil ordinary shares were cancelled. The Company recognized the difference between the repurchase costs and the par value in additional paid-in capital. The remaining 5,310,240 ordinary shares which were repurchased but not cancelled were recorded as treasury shares at purchase cost at the time of repurchase as of December 31, 2014.

16.Share-based Compensation

a)Share Incentive Plan

On May 14, 2007, the Board of Directors of the BVI Company approved the plan, which provides for the issuance of options to purchase up to 2,960,606 ordinary shares, to any qualified persons, as determined by the Board of Directors of the BVI Company. On December 8, 2010, the Board of Directors of the Company passed a resolution to increase the total number of ordinary shares reserved under the Plan to 5,233,920 ordinary shares.

On June 15, 2012, the shareholders passed a resolution to increase the maximum aggregate number of ordinary shares that may be delivered pursuant to awards granted to eligible persons under the Plan by 2,400,000 ordinary shares, from 5,233,920 ordinary shares to 7,633,920 ordinary shares, and amended the Plan to allow the administrator of the Plan to have additional flexibility to modify awards granted under this Plan, including the re-pricing of “underwater” share options, without shareholder approval.

As stipulated in the share option agreements, the awards granted shall vest in accordance with one of the following conditions: (1) over a four-year service period, with 25% of the options to vest on the first anniversary of the date of grant, and the remaining 75% of the options to vest on a pro-rata basis of the calendar quarter-end of each of the 12 quarters after the first anniversary of the date of grant; or (2) over a four-year service period, with 25% of the options to vest on the date of IPO, and the remaining 75% of the options to vest on a pro-rata basis on the calendar quarter-end of each of the 12 quarters following the date of IPO; or (3) 100% upon the date of IPO.

On July 12, 2012, the Board of Directors of the Company approved to amend certain option awards granted by the Company to a director and certain employees of the Company during the period from December 2010 to July 2011. A total of 546,000 share options granted at the original exercise prices of $5.00 to $7.44 per share were cancelled and replaced by a total of 255,453 share options with an exercise price of $3.227 per share, the then fair value of the ordinary share on the modification date.

On June 5, 2013, the Board of Directors of the Company approved to amend 120,850 share options granted by the Company to certain directors, employees of the Company and a non-employee on June 6, 2007 to extend the option life for one year to June 5, 2014.

F-30

On October 10, 2014, the Board of Directors of the Company approved to amend all of the share options that have not been exercised. After the modification, the new exercise price was reduced by US$0.67 per ADS compared with original exercise price.

The aforementioned modifications were accounted for pursuant to ASC 718 under US GAAP. The incremental fair value before and after the modification was recognized as follows: (a) for vested options, the incremental share-based compensation expenses are recognized immediately; (b) For non-vested options, the incremental share-based compensation expenses are recognized in the statement of comprehensive income over the remaining vesting period. The incremental fair values were determined to be immaterial.

The Company’s share option activities for the years ended December 31, 2012, 2013 and 2014 are summarized below:

	Share options outstanding
	Share options		Weighted average exercise price	Weighted average remaining contractual life (in years)	Weighted average grant date fair value
			US$		US$
Balances outstanding at January 1, 2012	4,382,636		2.78	4.23	1.57
Granted	2,410,000		3.35		1.26
Exercised	(913,801	)	1.05		0.90
Modified	(290,547	)	3.23		1.06
Forfeited	(1,169,906	)	4.35		1.95
Expired	(50,000	)	0.30		0.02
Balances outstanding at December 31, 2012	4,368,382		2.69	4.34	1.30
Granted	90,000		4.61		1.15
Exercised	(981,992	)	1.33		1.32
Forfeited	(291,915	)	3.87		1.37
Expired	(50,000	)	0.30		0.05
Balances outstanding at December 31, 2013	3,134,475		3.10	3.98	1.31
Granted	457,500		3.71		1.22
Exercised	(642,058	)	2.00		1.09
Forfeited	(173,462	)	3.41		1.28
Balances outstanding at December 31, 2014	2,776,455		3.02	3.65	1.30
Exercisable at December 31, 2012	1,353,698		1.40	2.39	1.24
Exercisable at December 31, 2013	1,357,529		2.75	3.40	1.31
Exercisable at December 31, 2014	1,373,002		2.82	3.15	1.36

As of December 31, 2014, the intrinsic value of outstanding and exercisable share options was US$918 and US$618, respectively, which is calculated as the difference between the Company’s closing stock price as of December 31, 2014 and the exercise price of the share options. For the year ended December 31, 2014, 722,919 shares of options were vested.

For the year ended December 31, 2012, 2013 and 2014, the total intrinsic value of options exercised was US$2,172, US$2,665 and US$1,709, respectively.

F-31

The fair value of each option at the grant date and modification date were estimated using the Binominal Option Pricing Model by the Company with assistance from independent valuation specialists.

The following table summarizes the assumptions used to estimate the fair values of the share options granted in the years presented:

	For the year ended December 31,
	2012	2013	2014
Risk-free interest rate	1.30%-2.25%	2.05%	2.70%
Exercise multiple	2.80	2.80	2.80
Expected forfeiture rate	5%	5%	5%
Contractual life of option	6 years	6 years	6 years
Expected volatility	38.00%-38.88%	39.00%	45.00%
Dividend yield	—	5%	4%

The risk-free interest rate was based on the market yield of US$ denominated China International Government Bonds with maturity terms equal to the contractual life of option. The exercise multiple is calculated as the ratio of fair value of stock over the exercise price as at the time the share option is exercised and estimated based on an empirical research study regarding the early exercise behavior of employees with share options. Expected forfeiture rate was estimated based on annual staff turnover for periods after June 2007. Pursuant to the Plan, the contractual life of the share options is 6 years. The expected volatility was estimated based on both historical volatility of comparable companies and historical volatility of the Company since January 1, 2012. For the options granted before 2013, no dividends were assumed in the estimation considering the Company has no history or expectation of paying dividends on its ordinary shares. For the options granted in 2013 and 2014, 5% and 4% dividends were assumed in the estimation respectively considering the Company’s plan to distribute annual dividends in 2013 and thereafter.

The total fair value of equity awards vested during the year ended December 31, 2012, 2013 and 2014 were RMB4,246, RMB9,275 and RMB5,912, respectively.

For the years ended December 31, 2012, 2013 and 2014, the Group recorded share-based compensation of RMB10,891, RMB8,276 and RMB5,522, respectively, using graded-vesting method, for the options granted with service conditions.

As of December 31, 2014, total amount of unrecognized compensation costs relating to non-vested share options granted by the Company amounted to RMB3,717. These unrecognized compensation costs are expected to be recognized over a weighted average period of 0.89 years.

b)Founder’s Shares

On December 16, 2009, pursuant to an agreement entered into by Ms. Haiyan Gong, the founder and Mr. Qingyuan Fang, the then chief operating officer (“COO”) of the Company (“Founder’s Share Agreement”), the COO was granted 398,000 options for the BVI Company’s ordinary shares (the “Founder’s Shares”) held by Aprilsky Ltd., a company ultimately owned by Ms. Haiyan Gong. The awards have an exercise price of US$1.256 and shall vest over a four year period, with 50% of the options to vest on the second anniversary and 50% of the options to vest on the fourth anniversary of the Founder’s Share Agreement signing date, subject to the employee’s continued service with the Company.

The Company recognized these awards as employee share-based compensation awards in accordance with the applicable guidance, and measured the fair value of the awards on the grant date. Compensation expense was recognized over the requisite service period using the graded vesting method.

Share-based compensation expenses related to the Founder’s Shares of RMB92, RMBnil and RMBnil were recognized in general and administrative expenses in the consolidated statements of comprehensive income for the year ended December 31, 2012, 2013 and 2014, respectively.

In July 2012, upon the termination of employment of the COO, the unexercised options were forfeited and the recognized compensation cost was reversed.

F-32

c)Restricted Shares

For the years ended December 31, 2012, 2013 and 2014, the Company granted 281,540, 34,286 and 486,000 restricted shares (the “Restricted Shares”), respectively, to certain key employees of the Company. These Restricted Shares shall vest over a four-year service period, with 25% of the Restricted Shares subject to vest on the first anniversary of the date of grant and the remaining 75% subject to vest in twelve quarterly installments.

The Company’s Restricted Shares’ activities for the year ended December 31, 2013 and 2014 are summarized below:

	Restricted Shares outstanding
	Restricted Shares		Weighted average remaining contractual life (in years)
Balances outstanding at December 31, 2012	281,540		5.34
Granted	34,286
Forfeited	(2,885	)
Balances outstanding at December 31, 2013	312,941		4.49
Granted	486,000
Exercised	(5,211	)
Forfeited	(13,623	)
Balances outstanding at December 31, 2014	780,107		4.73

The total fair value of Restricted Shares vested during the year ended December 31, 2012, 2013 and 2014 were RMBnil, RMB2,580 and RMB1,850, respectively.

For the year ended December 31, 2012, 2013 and 2014, the Group recorded share-based compensation of RMB2,380, RMB2,152 and RMB4,040, respectively, related to the Restricted Shares using the graded-vesting method.

As of December 31, 2014, unrecognized compensation expenses relating to the non-vested Restricted Shares amounted to RMB7,406. These expenses are expected to be recognized over a weighted average period of 1.03 years. For the year ended December 31, 2014, 80,198 restricted shares were vested.

17.Net Income Per Share

Basic and diluted net income per share for each of the years presented are calculated as follows:

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Numerator:
Net income	58,937	63,656	20,107
Denominator:
Weighted average number of ordinary shares outstanding—basic	46,297,314	44,910,676	44,423,885
Dilutive effect of share options	1,445,784	917,246	966,924
Weighted average number of ordinary shares outstanding—diluted	47,743,098	45,827,922	45,390,809
Basic net income per share	1.27	1.42	0.45
Diluted net income per share	1.23	1.39	0.44

For the years ended December 31, 2012, 2013 and 2014, the potentially dilutive share options and Restricted Shares of 1,012,007, 296,857 and 120,758, respectively, were not included in the calculation of diluted net income per share where their inclusion would be anti-dilutive.

F-33

As of December 31, 2013 and 2014, 339,366 and 592,097 ordinary shares were issued to a depository and the sole purpose of such depository is to issue ADS upon the exercise of options granted pursuant to the Plan. These shares were not issued to any option holders. The shares issued and held with the depository do not have any shareholder rights and do not have rights to any dividends if and when declared by the Company. Accordingly, these shares held with the depository are accounted for as if they were treasury shares. The Group did not include these ordinary shares in the calculation of basic and diluted net income per share for the year ended December 31, 2013 and 2014 as these shares are not considered outstanding for net income per share calculation purposes.

18.Commitments and Contingencies

a)Operating lease commitments

Future minimum payments under non-cancellable operating leases with initial terms in excess of one year consist of the following at December 31, 2014:

	Amount
	RMB
Year ending December 31,
2015	8,463
2016	5,382
2017	450
2018 and thereafter	—
Total	14,295

For the years ended December 31, 2012, 2013 and 2014, total rental expenses amounted to approximately RMB6,387, RMB4,795 and RMB4,843, respectively.

The Group did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2014.

b)Contingencies

The Group is not currently a party to, nor is aware of, any legal proceeding, investigation or claim which is likely to have a material adverse effect on the Group’s business, financial condition, results of operations, or cash flows. The Group did not record any legal contingencies as of December 31, 2014.

19.Related Party Transactions

The table below sets forth the related parties and their relationships with the Group:

Related Party	Relationship with the Group
Ms. Haiyan Gong(Note)	Nominee shareholder of the VIEs, non-executive co-chairman of the Board of Directors, and the Company’s shareholder.
Mr. JP Gan	Member of the Board of Directors and Compensation Committee, and the chairman of Company’s Nominating and Corporate Governance Committee.

Note: In March 2015, Ms. Haiyan Gong resigned from her position as a director of the Company and will no longer hold the position of co-chairman of the Board.

During the years presented in the financial statements, there were no significant related party transactions except for the following:

On December 24, 2012, the Group entered into a consultancy agreement with Ms. Haiyan Gong, under which Ms. Haiyan Gong agreed to provide, among other things, certain consultant services for a term of three years effective from January 1, 2013 and would receive a monthly fee of RMB49. The Group recorded general and administrative expense of RMB633 and RMB643 in connection with this agreement for the years ended December 31, 2013 and 2014, respectively.

F-34

On October 29, 2013, the Group entered into a personalized matchmaking services agreement with Mr. JP Gan, under which the Group agreed to provide personalized matchmaking services for RMB120 for a term of 20 months. The Group recognized revenues of RMB12 and RMB72 for the years ended December 31, 2013 and 2014, respectively.

20.Segment Information

In accordance with relevant US GAAP guidance, the reportable segments represent the Group’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker (“CODM”) to assess performance and to allocate resources. In identifying its reportable segments, the Group also considers the nature of services provided by its operating segments. The Group’s CODM has been identified as the Board of Directors (“BOD”), who reviews the consolidated and segment results when making decisions about allocation of resources and assessing performance of the Group.

Prior to 2013, the Group had operated in three reportable segments which were online services, events and personalized matchmaking services, and other services. In 2013, the Group restructured its personalized matchmaking business and entered into the cooperation arrangements with matchmaking service agencies in different cities in the PRC. In order to manage the business more effectively, the Group’s CODM are presented with financial information on this business on a stand-alone basis. In addition, financial information for events services was combined with other services when presented. Accordingly, the reportable segments are online services, personalized matchmaking services, and events and other services in 2013 and 2014. Information for net revenues, cost of revenues and gross profit by segment was recast to conform to the current presentation for all periods presented.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment’s revenues, cost of revenues, and gross profit. The CODM does not review operating expenses or balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM.

For the year ended December 31, 2012

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	362,492		33,143		15,168		410,803
Cost of revenues	(117,830	)	(15,903	)	(9,952	)	(143,685	)
Gross profit	244,662		17,240		5,216		267,118

For the year ended December 31, 2013

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	422,088		52,458		18,060		492,606
Cost of revenues	(140,975	)	(29,792	)	(9,754	)	(180,521	)
Gross profit	281,113		22,666		8,306		312,085

For the year ended December 31, 2014

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	425,544		164,598		23,848		613,990
Cost of revenues	(148,811	)	(117,054	)	(11,924	)	(277,789	)
Gross profit	276,733		47,544		11,924		336,201

The Group primarily operates in the PRC, accordingly, no geographical information is presented.

F-35

21.Restricted Net Assets

Relevant PRC laws and regulations permit payments of dividends by the Company’s subsidiaries, VIEs and VIE’s subsidiary in China only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company’s subsidiaries, VIEs and VIE subsidiary in China are required to make certain appropriation of net after-tax profits or increase in net assets to the statutory surplus fund (see Note 3(s)) prior to payment of any dividends. As a result of these and other restrictions under PRC laws and regulations, the Company’s subsidiaries, VIEs and VIE’s subsidiary in China are restricted in their ability to transfer their net assets to the Company in terms of cash dividends, loans or advances, which restricted portion amounted to approximately RMB120,528 and RMB113,771 as of December 31, 2013 and 2014, respectively. As of December 31, 2013 and 2014, the retained earnings balance of the Group’s PRC entities after appropriation to statutory reserves, as determined under PRC GAAP, was RMB219,876 and RMB262,568, respectively. Even though the Company currently does not require any such dividends, loans or advances from the PRC subsidiaries or VIEs for working capital and other funding purposes, the Company may in the future require additional cash resources from the Company’s subsidiaries, VIEs and VIE’s subsidiary in China due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends to make distributions to shareholders. Except for the above, there is no other restriction on use of proceeds generated by the Company’s subsidiaries, VIEs and VIE’s subsidiary to satisfy any obligations of the Company.

The Company performed a test on the restricted net assets of its consolidated subsidiaries, VIEs and VIE’s subsidiary (the “restricted net assets”) in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e)(3), “General Notes to the Financial Statements” and concluded that it was applicable for the Company to disclose the condensed financial information for the parent company for the year ended December 31, 2014. For the purposes of presenting parent only financial information, the Company records its investments in its subsidiaries and VIEs under the equity method of accounting. Such investments are presented on the separate condensed balance sheets of the Company as “Investments in subsidiaries and VIEs” and the profit of the VIEs is included in “Share of income of subsidiaries and VIEs” in the condensed statement of comprehensive income.

The subsidiaries did not pay any dividends to the Company for the years presented. Certain information and footnote disclosures generally included in financial statements prepared in accordance with US GAAP have been condensed and omitted. The footnote disclosures represent supplemental information relating to the operations of the Company, as such, these information should be read in conjunction with the notes to the consolidated financial statements of the Group.

As of December 31, 2013 and 2014, the Company had no significant capital and other commitments, long-term obligations, or guarantee.

The Company’s accounting policies are the same as the Group’s policies with the exception of the accounting for the investments in subsidiaries and VIE.

F-36

FINANCIAL INFORMATION OF PARENT COMPANY

 CONDENSED BALANCE SHEETS

AS OF DECEMBER 31, 2013 AND 2014

(All amounts in thousands)

	As of December 31,
	2013		2014		2014
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents	73,365		58,342		9,403
Short-term deposits	177,319		9,466		1,526
Prepaid expenses and other current assets	8,000		7,955		1,282
Total current assets	258,684		75,763		12,211
Non-current assets:
Investments in subsidiaries and VIEs	286,455		316,253		50,971
Total assets	545,139		392,016		63,182
LIABILITIES
Current liabilities:
Accrued expenses and other current liabilities, current portion	5,921		4,976		802
Total current liabilities	5,921		4,976		802
Total liabilities	5,921		4,976		802
SHAREHOLDERS’ EQUITY
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized as of December 31, 2013 and 2014; 49,030,944 shares issued and outstanding as of December 31, 2013; 49,930,944 shares issued and outstanding as of December 31, 2014)	349		354		57
Additional paid-in capital	506,458		358,768		57,823
Less: Treasury shares (4,145,729 and 5,310,240 shares as of December 31, 2013 and 2014, respectively)	(91,100	)	(117,480	)	(18,934	)
Statutory reserves	9,974		10,103		1,628
Retained earnings	126,367		146,345		23,587
Accumulated other comprehensive loss	(12,830	)	(11,050	)	(1,781	)
Total shareholders’ equity	539,218		387,040		62,380
Total liabilities and shareholders’ equity	545,139		392,016		63,182

F-37

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(All amounts in thousands)

	For the Year Ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
Operating expenses:
General and administrative expenses	(6,443	)	(4,461	)	(3,369	)	(543	)
Total operating expenses	(6,443	)	(4,461	)	(3,369	)	(543	)
Operating loss	(6,443	)	(4,461	)	(3,369	)	(543	)
Share of income of subsidiaries and VIEs	59,671		61,151		20,251		3,264
Interest income	6,595		4,329		4,147		668
Foreign currency exchange (loss)/income, net	(1,829	)	2,239		(1,536	)	(248	)
Other income, net	943		398		614		99
Income before income tax	58,937		63,656		20,107		3,240
Income tax expenses	—		—		—		—
Net income	58,937		63,656		20,107		3,240
Net income	58,937		63,656		20,107		3,240
Other comprehensive (loss)/income:
Foreign currency translation adjustments, net of tax of RMB nil	(775	)	(9,083	)	1,799		290
Share of other comprehensive income/(loss) of subsidiaries and VIEs, net of tax of RMB nil	3		65		(19	)	(3	)
Other comprehensive (loss)/income	(772	)	(9,018	)	1,780		287
Comprehensive income	58,165		54,638		21,887		3,527

F-38

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(In thousands)

	For the Year Ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
Cash flows provided by operating activities	26,046		519		491		79
Cash flows provided by/(used in) investing activities	146,504		(23,823	)	167,853		27,053
Cash flows used in financing activities	(57,660	)	(73,234	)	(183,627	)	(29,595	)
Effect of exchange rate changes on cash and cash equivalents	(2,604	)	(6,844	)	260		42
Net increase/(decrease) in cash and cash equivalents	112,286		(103,382	)	(15,023	)	(2,421	)
Cash and cash equivalents at beginning of year	64,461		176,747		73,365		11,824
Cash and cash equivalents at end of year	176,747		73,365		58,342		9,403

22.Subsequent Events

a)On February 26, 2015, the Company granted 427,500 restricted shares to one director and certain of its key employees. These restricted shares will vest over a four-year service period, with 25% of the restricted shares subject to vesting on the first anniversary of the date of grant and the remaining 75% subject to vesting in twelve quarterly installments.

F-39

EX-8.1

Exhibit 8.1

Subsidiaries of The Registrant

As of March 31, 2015

Wholly-Owned Subsidiaries

1. Harper Capital Inc., a British Virgin Islands company

2. Jiayuan Hong Kong Corporation Limited, a Hong Kong company

3. Miyuan (Shanghai) Information Technology Co., Ltd., a PRC company

4. Beijing Miyuan Information Technology Co., Ltd., a PRC company

Special Purpose Entities and its Subsidiaries Consolidated in the Registrant’s Financial Statement

5. Shanghai Huaqianshu Information Technology Co., Ltd., a PRC company

6. Beijing Huaqianshu Information Technology Co., Ltd., a PRC company

7. Beijing Shiji Xique Information Technology Co., Ltd., a PRC company

8. Shiji Jiayuan Matchmaking Services Center, a PRC company

9. Beijing Aizhenxin Information Technology Co., Ltd., a PRC company

EX-12.1

Exhibit 12.1

Certification by the Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Linguang Wu, certify that:

1. I have reviewed this annual report on Form 20-F of Jiayuan.com International Ltd. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 16, 2015

By:	/s/ Linguang Wu
	Name:	Linguang Wu
	Title:	Chief Executive Officer

EX-12.2

Exhibit 12.2

Certification by the Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Shang-Hsiu Koo, certify that:

1. I have reviewed this annual report on Form 20-F of Jiayuan.com International Ltd. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 16, 2015

By:	/s/ Shang-Hsiu Koo
	Name:	Shang-Hsiu Koo
	Title:	Chief Financial Officer

EX-13.1

Exhibit 13.1

Certification by the Chief Executive Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Jiayuan.com International Ltd. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Linguang Wu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 16, 2015

By:	/s/ Linguang Wu
	Name:	Linguang Wu
	Title:	Chief Executive Officer

EX-13.2

Exhibit 13.2

Certification by the Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Jiayuan.com International Ltd. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shang-Hsiu Koo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 16, 2015

By:	/s/ Shang-Hsiu Koo
	Name:	Shang-Hsiu Koo
	Title:	Chief Financial Officer

EX-15.1

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-177877 and 333-184079) of Jiayuan.com International Ltd., of our report dated April 16, 2015 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.

/s/ PricewaterhouseCoopers Zhong Tian LLP

Beijing, the People’s Republic of China

April 16, 2015

EX-15.2

Exhibit 15.2

April 16, 2015

Jiayuan.com International Ltd.

15/F, Anhua Development Building

No. 35 Anding Road

Chaoyang District, Beijing 100029

People’s Republic of China

Ladies and Gentlemen:

We hereby consent to the use of our name and the summary of our opinion under the captions “Risk Factors” and “Organizational Structure” in Jiayuan.com International Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2014, which was filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2015 (the “Annual Report”), and further consent to the incorporation by reference of such information into the Registration Statement on Form S-8 (file number 333-177877) and the Registration Statement on Form S-8 (file number 333-184079) of Jiayuan.com International Ltd. filed with the SEC on November 10, 2011 and on September 25, 2012, respectively. We also consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report.

In giving such consent, we do not thereby admit that we fall within the category of the person whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the regulations promulgated thereunder.

Yours faithfully,

/s/ Zhong Lun Law Firm

Zhong Lun Law Firm

EX-15.3

Exhibit 15.3

Consent of iResearch Consulting Group

April 2, 2015

Jiayuan.com International Ltd.

15/F Anhua Development Building

No. 35 Anding Road

Chaoyang District, Beijing

The People’s Republic of China

Ladies and Gentlemen:

iResearch Consulting Group hereby consents to references to its name in the annual report on Form 20-F of Jiayuan.com International Ltd. (the “Company”) for the fiscal year ended December 31, 2014 (together with any amendments thereto, the “Annual Report”) and any other future filings with the SEC, including filings on Form 6-K or other SEC filings (collectively, the “SEC Filings”).

iResearch Consulting Group further consents to inclusion of information, data and statements from a report prepared by iResearch Consulting Group for the Company (the “Report”) in the Company’s Annual Report and SEC Filings, and citation of the Report in the Company’s Annual Report and SEC Filings.

iResearch Consulting Group also hereby consents to the filing of this letter as an exhibit to the Annual Report.

Yours faithfully

(Company Seal)[seal: Shanghai iResearch Co., Ltd.]

For and on behalf of

iResearch Consulting Group

/s/ (Company Seal)[seal: Shanghai iResearch Co., Ltd.]

Name: Lui Zhuo Ya

Title: Senior Account Manager

EX-15.4

Exhibit 15.4

Our ref	JUH/660390-000001/8046428v2
Direct tel	+852 3690-7431
E-mail	juno.huang@maplesandcalder.com

Jiayuan.com International Ltd.

15th Floor, Anhua Development Building

No.35 An Ding Road

Chao Yang District

Beijing, China

16 April 2015

Dear Sir

Jiayuan.com International Ltd. (the “Company”)

We have acted as legal advisers as to the laws of the Cayman Islands to Jiayuan.com International Ltd. an exempted limited liability company incorporated in the Cayman Islands (the “Company”), in connection with the filing by the Company with the United States Securities and Exchange Commission of an annual report on Form 20-F for the year ended 31 December 2014 (“Form 20-F”).

We hereby consent to the reference of our name under the heading “You may have difficulties in enforcing judgments obtained against us” in the Form 20-F.

Yours faithfully

/s/ Maples and Calder

Maples and Calder

XML

Intangible assets, net (Tables)

12 Months Ended

Dec. 31, 2014

Intangible assets, net

Summary of the Company's intangible assets, net

	As of December 31,
	2013		2014
	RMB		RMB
Brand name	2,141		2,141
Customer relationships	1,637		1,637
Source code	933		933
Domain names	305		305
	5,016		5,016
Less: accumulated amortization	(741	)	(1,406	)
Intangible assets, net	4,275		3,610

Schedule of amortization expenses for future periods

As of December 31, 2014, amortization expenses for future periods are estimated as follows:

For the year ended December 31,	Amortization expenses
	RMB
2015	665
2016	665
2017	612
2018	338
2019	338
Thereafter	992
Total	3,610

XML

Summary of Significant Accounting Policies (Details 5)	Dec. 31, 2014
Net income per share and per American Depository Share ("ADS")
Number of American Depository Shares per ordinary share of the company	0.667

XML

Principal Activities and Organization (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	12 Months Ended	0 Months Ended
	May 16, 2011	Dec. 31, 2014	Jan. 26, 2011
Principal activities and organization
Net proceeds received by the Company from IPO, after deducting commissions and offering expenses	$ 65,243
Shanghai HQS
Principal activities and organization
Percentage of ownership interest in VIE		100.00%
Beijing HQS
Principal activities and organization
Percentage of ownership interest in VIE		100.00%
Xique
Principal activities and organization
Percentage of ownership interest in VIE		100.00%
Beijing Aizhenxin
Principal activities and organization
Percentage of ownership interest in VIE		100.00%
Jiayuan Shanghai Center
Principal activities and organization
Percentage of ownership interest in VIE subsidiary		100.00%
BVI Company
Principal activities and organization
Exchange ratio			1
Percentage of ownership interest in subsidiary		100.00%
Shanghai Miyuan
Principal activities and organization
Percentage of ownership interest in subsidiary		100.00%
Jiayuan Hong Kong
Principal activities and organization
Percentage of ownership interest in subsidiary		100.00%
Beijing Miyuan
Principal activities and organization
Percentage of ownership interest in subsidiary		100.00%
Ordinary shares
Principal activities and organization
Issuance of shares (in shares)	10,050,000
ADSs
Principal activities and organization
Issuance of shares (in shares)	6,700,000

XML

Taxation (Details 5) (CNY) In Thousands, unless otherwise specified	Dec. 31, 2014
Net operating loss carry forwards
Net operating loss carry forwards from certain subsidiary, VIEs and VIE's subsidiary	34,217
Expiring on 31st December 2015
Net operating loss carry forwards
Net operating loss carry forwards from certain subsidiary, VIEs and VIE's subsidiary	1,983
Expiring on 31st December 2016
Net operating loss carry forwards
Net operating loss carry forwards from certain subsidiary, VIEs and VIE's subsidiary	6,392
Expiring on 31st December 2017
Net operating loss carry forwards
Net operating loss carry forwards from certain subsidiary, VIEs and VIE's subsidiary	3,522
Expiring on 31st December 2018
Net operating loss carry forwards
Net operating loss carry forwards from certain subsidiary, VIEs and VIE's subsidiary	5,043
Expiring on 31st December 2019
Net operating loss carry forwards
Net operating loss carry forwards from certain subsidiary, VIEs and VIE's subsidiary	16,204

XML

Concentration, Credit and Other Risks (Details) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2014 Consolidated variable interest entities and VIE's subsidiary CNY	Dec. 31, 2013 Consolidated variable interest entities and VIE's subsidiary CNY	Dec. 31, 2012 Consolidated variable interest entities and VIE's subsidiary CNY
Concentration, credit and other risks
Total assets		633,177	501,281
Total liabilities		409,772	312,572
Payable to third parties		270,533	189,803
Payable to Group entities		139,239	122,769
Net revenue	98,957	613,990	492,606	410,803	614,239	492,799	411,084
Net income	3,240	20,107	63,656	58,937	25,133	61,608	23,038
Inter-company service fees paid/payable					11,615	9,278	43,446
Cash flows provided by operating activities	12,441	77,198	166,967	57,685	90,925	151,318	54,966
Cash flows provided by/(used in) investing activities	11,323	70,258	(111,747)	78,960	(97,104)	(87,916)	(67,544)
Effect of exchange rate changes on cash and cash equivalents	69	415	(7,082)	(2,617)	134	(180)	(11)
Net increase/(decrease) in cash and cash equivalents	(5,762)	(35,756)	(25,096)	76,369	(6,045)	63,222	(12,589)
Property and equipment, intangible assets and goodwill of VIEs
Property and equipment, net	14,778	91,694	99,484		91,208	99,296
Intangible assets, net	582	3,610	4,275		3,610	4,275
Goodwill	$ 127	789	789		789	789
Original maturity term of available-for-sale securities which were placed with a financial institution	1 month	1 month

XML

Commitments and Contingencies (Details) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Future minimum payments under non-cancellable operating leases
2015	8,463
2016	5,382
2017	450
Total	14,295
Total rental expenses	4,843	4,795	6,387

XML

Segment Information (Tables)

12 Months Ended

Dec. 31, 2014

Segment Information

Schedule of information for net revenue, cost of revenues and gross profit

For the year ended December 31, 2012

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	362,492		33,143		15,168		410,803
Cost of revenues	(117,830	)	(15,903	)	(9,952	)	(143,685	)
Gross profit	244,662		17,240		5,216		267,118

For the year ended December 31, 2013

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	422,088		52,458		18,060		492,606
Cost of revenues	(140,975	)	(29,792	)	(9,754	)	(180,521	)
Gross profit	281,113		22,666		8,306		312,085

For the year ended December 31, 2014

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	425,544		164,598		23,848		613,990
Cost of revenues	(148,811	)	(117,054	)	(11,924	)	(277,789	)
Gross profit	276,733		47,544		11,924		336,201

XML

Concentration, Credit and Other Risks (Tables)

12 Months Ended

Dec. 31, 2014

Concentration, Credit and Other Risks

Schedule of combined financial information of the Group's VIEs and VIE's subsidiary

	As of December 31,
	2013	2014
	RMB	RMB
Total assets	501,281	633,177
Total liabilities	312,572	409,772
Payable to third parties	189,803	270,533
Payable to Group entities	122,769	139,239

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Net revenue	411,084	492,799	614,239
Net income	23,038	61,608	25,133
Inter-company service fees paid/payable	43,446	9,278	11,615

	For the year ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Net cash provided by operating activities	54,966		151,318		90,925
Net cash used in investing activities	(67,544	)	(87,916	)	(97,104	)
Effect of exchange rate changes on cash and cash equivalents	(11	)	(180	)	134
Net (decrease)/increase in cash and cash equivalents	(12,589	)	63,222		(6,045	)

Schedule of the carrying values of property and equipment, intangible assets and goodwill of VIEs

	As of December 31,
	2013	2014
	RMB	RMB
Property and equipment, net	99,296	91,208
Intangible assets, net	4,275	3,610
Goodwill	789	789

XML

Related Party Transactions (Details) (CNY) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended		0 Months Ended
	Dec. 24, 2012	Dec. 31, 2014	Dec. 31, 2013	Oct. 29, 2013
Ms Haiyan Gong
Related party transactions
Term of agreement	3 years
General and administrative expense		643	633
Monthly fee for consultancy services	49
Mr. JP Gan
Related party transactions
Term of agreement				20 months
Fee for personalized matchmaking services				120
Revenues recognized		72	12

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Share-based Compensation (Details) (Share Incentive Plan, USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended				0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jul. 12, 2012	Oct. 10, 2014	Jun. 05, 2014	Jun. 15, 2012	Dec. 08, 2010	May 14, 2007
Share options
Balances outstanding at the beginning of the period (in shares)	3,134,475	4,368,382	4,382,636
Granted (in shares)	457,500	90,000	2,410,000
Exercised (in shares)	(642,058)	(981,992)	(913,801)
Modified (in shares)			(290,547)
Forfeited (in shares)	(173,462)	(291,915)	(1,169,906)
Expired (in shares)		(50,000)	(50,000)
Balances outstanding at the end of the period (in shares)	2,776,455	3,134,475	4,368,382	4,382,636
Exercisable at the end of the period (in shares)	1,373,002	1,357,529	1,353,698
Weighted average exercise price
Balances outstanding at beginning of period (in dollars per share)	$ 3.10	$ 2.69	$ 2.78
Granted (in dollars per share)	$ 3.71	$ 4.61	$ 3.35
Exercised (in dollars per share)	$ 2.00	$ 1.33	$ 1.05
Modified (in dollars per share)			$ 3.23
Forfeited (in dollars per share)	$ 3.41	$ 3.87	$ 4.35
Expired (in dollars per share)		$ 0.30	$ 0.30
Outstanding at end of year (in dollars per share)	$ 3.02	$ 3.10	$ 2.69	$ 2.78
Exercisable at the end of the period (in dollars per share)	$ 2.82	$ 2.75	$ 1.40
Weighted average remaining contractual life (in years)
Balances outstanding at the end of the period	3 years 7 months 24 days	3 years 11 months 23 days	4 years 4 months 2 days	4 years 2 months 23 days
Exercisable at the end of the period	3 years 1 month 24 days	3 years 4 months 24 days	2 years 4 months 21 days
Weighted average grant date fair value
Balances outstanding at the beginning of the period (in dollars per share)	$ 1.31	$ 1.30	$ 1.57
Granted (in dollars per share)	$ 1.22	$ 1.15	$ 1.26
Exercised (in dollars per shares)	$ 1.09	$ 1.32	$ 0.90
Modified (in dollars per share)			$ 1.06
Forfeited (in dollars per share)	$ 1.28	$ 1.37	$ 1.95
Expired (in dollars per share)		$ 0.05	$ 0.02
Balances outstanding at the end of the period (in dollars per share)	$ 1.30	$ 1.31	$ 1.30	$ 1.57
Exercisable at the end of the period (in dollars per share)	$ 1.36	$ 1.31	$ 1.24
Intrinsic value information
Intrinsic value of outstanding options (in dollars)	$ 918
Intrinsic value of exercisable options (in dollars)	618
Vested (in shares)	722,919
Total intrinsic value of options exercised	$ 1,709	$ 2,665	$ 2,172
Director and certain employees
Share-based compensation
Shares cancelled					546,000
Share options
Granted (in shares)					255,453
Weighted average exercise price
Modified (in dollars per share)					$ 3.227
Director and certain employees | ADSs
Weighted average exercise price
Decrease in original exercise prices (in dollars per share)						$ 0.67
Director and certain employees | Minimum
Weighted average exercise price
Granted (in dollars per share)					$ 5.00
Director and certain employees | Maximum
Weighted average exercise price
Granted (in dollars per share)					$ 7.44
Director, employees and non-employee
Share-based compensation
Extended option life							1 year
Share options
Share options amended (in shares)							120,850
Condition one
Share-based compensation
Total requisite service period as stipulated in the share option agreements	4 years
Condition one | First anniversary of the date of grant
Share-based compensation
Portion of options vesting (as a percent)	25.00%
Condition one | Pro-rata vesting on calendar quarter-end of each 12 quarters after first anniversary of grant
Share-based compensation
Portion of options vesting (as a percent)	75.00%
Number of calendar quarters for pro-rata vesting	12
Condition two
Share-based compensation
Total requisite service period as stipulated in the share option agreements	4 years
Condition two | Vesting on date of IPO
Share-based compensation
Portion of options vesting (as a percent)	25.00%
Condition two | Pro-rata vesting on calendar quarter-end of each 12 quarters following IPO
Share-based compensation
Portion of options vesting (as a percent)	75.00%
Number of calendar quarters for pro-rata vesting	12
Condition three | Vesting on date of IPO
Share-based compensation
Portion of options vesting (as a percent)	100.00%
BVI Company
Share-based compensation
Shares approved for purchase by issuance of options under the plan								7,633,920	5,233,920	2,960,606
Authorized shares increased for purchase by issuance of options under the plan								2,400,000

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Accounts Receivable, net (Details) In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY
Accounts Receivable, net
Accounts receivable		38,875	33,987
Less: Allowance for doubtful accounts		(1,130)		(110)
Accounts receivable, net	$ 6,083	37,745	33,987

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Share-based Compensation (Details 4) (Restricted Shares, CNY) In Thousands, except Share data, unless otherwise specified	1 Months Ended	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based compensation
Vesting period		4 years
Restricted Shares
Balance outstanding at the beginning of the period (in shares)		312,941	281,540
Granted (in shares)	281,540	486,000	34,286
Exercised (in shares)		(5,211)
Forfeited (in shares)		(13,623)	(2,885)
Balance outstanding at the end of the period (in shares)	281,540	780,107	312,941	281,540
Weighted average remaining contractual life
Balance outstanding at the end of the period		4 years 8 months 23 days	4 years 5 months 27 days	5 years 4 months 2 days
Additional disclosures
Fair value of awards vested		1,850	2,580	0
Share-based compensation		4,040	2,152	2,380
Unrecognized compensation expenses		7,406
Weighted average period over which unrecognized compensation expenses are expected to be recognized		1 year 11 days
Vested (in shares)		80,198
First anniversary of the date of grant
Share-based compensation
Percentage of awards subject to vest		25.00%
Pro-rata vesting on calendar quarter-end of each 12 quarters after first anniversary of grant
Share-based compensation
Percentage of awards subject to vest		75.00%
Period of vesting of the remaining 75% awards granted		12

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Restricted Net Assets (Details) In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2014 The PRC CNY	Dec. 31, 2013 The PRC CNY
Restricted Net Assets
Restricted net assets				113,771	120,528
Retained earnings balance of the Group's PRC entities after appropriation to statutory reserves	$ 23,587	146,345	126,367	262,568	219,876

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Net Income Per Share (Details) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY
Numerator:
Net income	$ 3,240	20,107	63,656	58,937
Denominator:
Weighted average number of ordinary shares outstanding-basic	44,423,885	44,423,885	44,910,676	46,297,314
Dilutive effect of share options	966,924	966,924	917,246	1,445,784
Weighted average number of ordinary shares outstanding-diluted	45,390,809	45,390,809	45,827,922	47,743,098
Basic net income per share (in CNY per share)	$ 0.07	0.45	1.42	1.27
Diluted net income per share (in CNY per share)	$ 0.07	0.44	1.39	1.23
Potentially dilutive share options and restricted shares not included in the calculation of diluted net income per share	120,758	120,758	296,857	1,012,007
Ordinary shares issued to depository for issuance of ADS upon exercise of options	592,097	592,097	339,366

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Taxation (Details 6) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Movements of valuation allowance
Balance at beginning of the year	(19,863)	(17,315)	(13,652)
Provision for the year	(633)	(2,548)	(3,663)
Balance at end of the year	(20,496)	(19,863)	(17,315)
Maximum
Income tax valuation allowance
Deductible advertising expenses as percentage of revenues	15.00%

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies

Commitments and Contingencies

18.Commitments and Contingencies

a)Operating lease commitments

Future minimum payments under non-cancellable operating leases with initial terms in excess of one year consist of the following at December 31, 2014:

	Amount
	RMB
Year ending December 31,
2015	8,463
2016	5,382
2017	450
2018 and thereafter	—
Total	14,295

For the years ended December 31, 2012, 2013 and 2014, total rental expenses amounted to approximately RMB6,387, RMB4,795 and RMB4,843, respectively.

The Group did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2014.

b)Contingencies

The Group is not currently a party to, nor is aware of, any legal proceeding, investigation or claim which is likely to have a material adverse effect on the Group’s business, financial condition, results of operations, or cash flows. The Group did not record any legal contingencies as of December 31, 2014.

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Summary of Significant Accounting Policies (Details) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 entity	Dec. 31, 2013	Dec. 31, 2012
Basis of presentation and consolidation, information pertaining to Company or its subsidiaries
Number of entities in which the Company has variable interest but is not the primary beneficiary	0
Convenience translation
Rate for translation of balances of financial statements from RMB to US$	6.2046
Accounts receivable and allowance for doubtful accounts
Allowance for doubtful accounts	1,130	0	110
Office building
Investments in real estate
Estimated useful lives	30 years
Office building improvements
Investments in real estate
Estimated useful lives	10 years
Computer and software
Investments in real estate
Estimated useful lives	3 years
Furniture, fixtures and other equipment
Investments in real estate
Estimated useful lives	3 years
Motor vehicles
Investments in real estate
Estimated useful lives	4 years

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Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Share-based Compensation

Schedule of the Company's share option activities

	Share options outstanding
	Share options		Weighted average exercise price	Weighted average remaining contractual life (in years)	Weighted average grant date fair value
			US$		US$
Balances outstanding at January 1, 2012	4,382,636		2.78	4.23	1.57
Granted	2,410,000		3.35		1.26
Exercised	(913,801	)	1.05		0.90
Modified	(290,547	)	3.23		1.06
Forfeited	(1,169,906	)	4.35		1.95
Expired	(50,000	)	0.30		0.02
Balances outstanding at December 31, 2012	4,368,382		2.69	4.34	1.30
Granted	90,000		4.61		1.15
Exercised	(981,992	)	1.33		1.32
Forfeited	(291,915	)	3.87		1.37
Expired	(50,000	)	0.30		0.05
Balances outstanding at December 31, 2013	3,134,475		3.10	3.98	1.31
Granted	457,500		3.71		1.22
Exercised	(642,058	)	2.00		1.09
Forfeited	(173,462	)	3.41		1.28
Balances outstanding at December 31, 2014	2,776,455		3.02	3.65	1.30
Exercisable at December 31, 2012	1,353,698		1.40	2.39	1.24
Exercisable at December 31, 2013	1,357,529		2.75	3.40	1.31
Exercisable at December 31, 2014	1,373,002		2.82	3.15	1.36

Summary of the assumptions used to estimate the fair values of the share options granted

	For the year ended December 31,
	2012	2013	2014
Risk-free interest rate	1.30%-2.25%	2.05%	2.70%
Exercise multiple	2.80	2.80	2.80
Expected forfeiture rate	5%	5%	5%
Contractual life of option	6 years	6 years	6 years
Expected volatility	38.00%-38.88%	39.00%	45.00%
Dividend yield	—	5%	4%

Summary of Restricted Shares activities

	Restricted Shares outstanding
	Restricted Shares		Weighted average remaining contractual life (in years)
Balances outstanding at December 31, 2012	281,540		5.34
Granted	34,286
Forfeited	(2,885	)
Balances outstanding at December 31, 2013	312,941		4.49
Granted	486,000
Exercised	(5,211	)
Forfeited	(13,623	)
Balances outstanding at December 31, 2014	780,107		4.73

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Share-based Compensation (Details 3) (Founder's Share Agreement) In Thousands, except Share data, unless otherwise specified	12 Months Ended			0 Months Ended
	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 16, 2009 BVI Company COO USD ($)	Dec. 16, 2009 BVI Company Vesting on second anniversary of agreement date COO	Dec. 16, 2009 BVI Company Vesting on fourth anniversary of agreement date COO
Share-based compensation
Options granted (in shares)				398,000
Options granted (in dollars per share)				$ 1.256
Vesting period of awards				4 years
Portion of options vested (as a percent)					50.00%	50.00%
Share-based compensation in general and administrative expenses	0	0	92

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Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2014

Property and Equipment, net

Schedule of property and equipment, net

	As of December 31,
	2013		2014
	RMB		RMB
Office buildings	77,797		77,797
Office buildings improvements	3,884		3,948
Computer and software	54,271		56,942
Furniture, fixture and other equipment	4,544		4,960
Motor vehicles	407		407
Leasehold improvements	3,296		4,254
	144,199		148,308
Less: accumulated depreciation and amortization	(44,715	)	(56,614	)
Property and equipment, net	99,484		91,694

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Summary of Significant Accounting Policies (Details 3) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Employee benefit expenses
Employee benefit expenses	20,553	17,568	14,005
The PRC
Income tax
Withholding tax rate payable by foreign-invested entities (as a percent)	10.00%
Withholding tax rate payable by foreign-invested entities with parent company incorporated in specified jurisdiction (as a percent)	5.00%
Minimum percentage of equity interests held by the holding entity in foreign invested enterprise to be considered to be subject to 5% withholding tax rate	25.00%

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Taxation (Details 2) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended	12 Months Ended				0 Months Ended				12 Months Ended
	May 06, 2013	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012	Oct. 29, 2014 ADSs USD ($)	Jun. 18, 2013 ADSs USD ($)	Sep. 29, 2014 ADSs USD ($)	May 16, 2013 ADSs USD ($)	Dec. 31, 2014 Hong Kong Jiayuan Hong Kong	Dec. 31, 2013 Hong Kong Jiayuan Hong Kong	Dec. 31, 2012 Hong Kong Jiayuan Hong Kong	Dec. 31, 2014 The PRC CNY	Dec. 31, 2014 The PRC High and new technology enterprise	Dec. 31, 2014 The PRC Qualified software enterprise	Dec. 31, 2014 The PRC Qualified key software enterprises	Dec. 31, 2014 The PRC Shanghai Miyuan	Dec. 31, 2010 The PRC Shanghai Miyuan	Dec. 31, 2014 The PRC Shanghai Miyuan Qualified software enterprise	Dec. 31, 2013 The PRC Shanghai Miyuan Qualified software enterprise	Dec. 31, 2015 The PRC Shanghai Miyuan Qualified software enterprise Future	Dec. 31, 2014 The PRC Shanghai HQS High and new technology enterprise	Dec. 31, 2013 The PRC Shanghai HQS High and new technology enterprise	Dec. 31, 2012 The PRC Shanghai HQS High and new technology enterprise	Dec. 31, 2011 The PRC Shanghai HQS High and new technology enterprise	Dec. 31, 2010 The PRC Shanghai HQS High and new technology enterprise	Dec. 31, 2015 The PRC Shanghai HQS High and new technology enterprise Future	Dec. 31, 2014 The PRC Shanghai HQS Qualified software enterprise	Dec. 31, 2013 The PRC Shanghai HQS Qualified software enterprise	Dec. 31, 2014 The PRC Beijing HQS	Dec. 31, 2013 The PRC Beijing HQS	Dec. 31, 2012 The PRC Beijing HQS	Dec. 31, 2014 The PRC Xique	Dec. 31, 2013 The PRC Xique	Dec. 31, 2012 The PRC Xique	Dec. 31, 2014 The PRC Beijing Aizhenxin	Dec. 31, 2013 The PRC Beijing Aizhenxin	Dec. 31, 2012 The PRC Beijing Aizhenxin	Dec. 31, 2014 The PRC Beijing Miyuan Qualified software enterprise	Dec. 31, 2014 The PRC Jiayuan Shanghai Center	Dec. 31, 2013 The PRC Jiayuan Shanghai Center	Dec. 31, 2012 The PRC Jiayuan Shanghai Center	Dec. 31, 2014 Cayman Islands
Income tax
Withholding income tax rate upon payment of dividends by the Company to its shareholders																																											0.00%
Statutory tax rate (as a percent)		25.00%	25.00%	25.00%	25.00%					16.50%	16.50%	16.50%	25.00%				25.00%	25.00%												25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%		25.00%	25.00%	25.00%
Preferential income tax rate (as a percent)														15.00%		10.00%			12.50%	12.50%	12.50%	15.00%	15.00%	15.00%	15.00%	15.00%	15.00%	10.00%	10.00%										12.50%
Exemption period for income tax rate															2 years																								2 years
Reduction in income tax for three years following the exemption period (as a percent)															50.00%																								50.00%
Exemption period for 50% reduction in the tax rate following initial exemption period															3 years																								3 years
Withholding tax rate payable by foreign-invested entities (as a percent)													10.00%
Withholding tax rate payable by foreign-invested entities with parent company incorporated in specified jurisdiction (as a percent)													5.00%
Special cash dividend declared (in dollars per share)								$ 0.67	$ 0.26
Special dividend paid		$ 26,746	165,951	48,246		$ 19,767	$ 7,800
Withholding tax withheld on behalf of the Company's shareholders													0
Annual dividends payable as percentage of annual net income before share-based compensation expenses	60.00%
Deferred tax liabilities for the accumulated earnings expected to be distributed as cash dividends from the Group's PRC entities to the Group's overseas entities			6,517	4,590
Undistributed earnings from the Group's PRC entities			262,568	219,876
Estimated foreign withholding taxes due upon remittance of undistributed earnings			26,257	21,988

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Property and Equipment, net (Details) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2014 USD ($)	Dec. 31, 2014 Office building CNY	Dec. 31, 2013 Office building CNY	Dec. 31, 2014 Office building improvements CNY	Dec. 31, 2013 Office building improvements CNY	Dec. 31, 2014 Computer and software CNY	Dec. 31, 2013 Computer and software CNY	Dec. 31, 2014 Furniture, fixtures and other equipment CNY	Dec. 31, 2013 Furniture, fixtures and other equipment CNY	Dec. 31, 2014 Motor vehicles CNY	Dec. 31, 2013 Motor vehicles CNY	Dec. 31, 2014 Leasehold improvements CNY	Dec. 31, 2013 Leasehold improvements CNY
Property and equipment, net
Property and equipment, gross	148,308	144,199			77,797	77,797	3,948	3,884	56,942	54,271	4,960	4,544	407	407	4,254	3,296
Less: accumulated depreciation and amortization	(56,614)	(44,715)
Property and equipment, net	91,694	99,484		14,778
Depreciation and amortization expenses for the property and equipment	13,716	15,576	13,264

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Restricted Net Assets (Tables)

12 Months Ended

Dec. 31, 2014

Restricted Net Assets

FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED BALANCE SHEETS

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED BALANCE SHEETS

AS OF DECEMBER 31, 2013 AND 2014

(All amounts in thousands)

	As of December 31,
	2013		2014		2014
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents	73,365		58,342		9,403
Short-term deposits	177,319		9,466		1,526
Prepaid expenses and other current assets	8,000		7,955		1,282
Total current assets	258,684		75,763		12,211
Non-current assets:
Investments in subsidiaries and VIEs	286,455		316,253		50,971
Total assets	545,139		392,016		63,182
LIABILITIES
Current liabilities:
Accrued expenses and other current liabilities, current portion	5,921		4,976		802
Total current liabilities	5,921		4,976		802
Total liabilities	5,921		4,976		802
SHAREHOLDERS’ EQUITY
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized as of December 31, 2013 and 2014; 49,030,944 shares issued and outstanding as of December 31, 2013; 49,930,944 shares issued and outstanding as of December 31, 2014)	349		354		57
Additional paid-in capital	506,458		358,768		57,823
Less: Treasury shares (4,145,729 and 5,310,240 shares as of December 31, 2013 and 2014, respectively)	(91,100	)	(117,480	)	(18,934	)
Statutory reserves	9,974		10,103		1,628
Retained earnings	126,367		146,345		23,587
Accumulated other comprehensive loss	(12,830	)	(11,050	)	(1,781	)
Total shareholders’ equity	539,218		387,040		62,380
Total liabilities and shareholders’ equity	545,139		392,016		63,182

FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(All amounts in thousands)

	For the Year Ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
Operating expenses:
General and administrative expenses	(6,443	)	(4,461	)	(3,369	)	(543	)
Total operating expenses	(6,443	)	(4,461	)	(3,369	)	(543	)
Operating loss	(6,443	)	(4,461	)	(3,369	)	(543	)
Share of income of subsidiaries and VIEs	59,671		61,151		20,251		3,264
Interest income	6,595		4,329		4,147		668
Foreign currency exchange (loss)/income, net	(1,829	)	2,239		(1,536	)	(248	)
Other income, net	943		398		614		99
Income before income tax	58,937		63,656		20,107		3,240
Income tax expenses	—		—		—		—
Net income	58,937		63,656		20,107		3,240
Net income	58,937		63,656		20,107		3,240
Other comprehensive (loss)/income:
Foreign currency translation adjustments, net of tax of RMB nil	(775	)	(9,083	)	1,799		290
Share of other comprehensive income/(loss) of subsidiaries and VIEs, net of tax of RMB nil	3		65		(19	)	(3	)
Other comprehensive (loss)/income	(772	)	(9,018	)	1,780		287
Comprehensive income	58,165		54,638		21,887		3,527

FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED STATEMENTS OF CASH FLOWS

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(In thousands)

	For the Year Ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
Cash flows provided by operating activities	26,046		519		491		79
Cash flows provided by/(used in) investing activities	146,504		(23,823	)	167,853		27,053
Cash flows used in financing activities	(57,660	)	(73,234	)	(183,627	)	(29,595	)
Effect of exchange rate changes on cash and cash equivalents	(2,604	)	(6,844	)	260		42
Net increase/(decrease) in cash and cash equivalents	112,286		(103,382	)	(15,023	)	(2,421	)
Cash and cash equivalents at beginning of year	64,461		176,747		73,365		11,824
Cash and cash equivalents at end of year	176,747		73,365		58,342		9,403

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Variable Interest Entities

12 Months Ended

Dec. 31, 2014

Variable Interest Entities

Variable Interest Entities

2.Variable Interest Entities

To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provide Internet content services in the PRC, the Company provides its services through VIEs which hold the licenses and approvals to provide Internet content services in the PRC. The Company also provides certain personalized matchmaking services through Shanghai HQS, Beijing HQS and Jiayuan Shanghai Center which holds the licenses and approvals to provide personalized matchmaking services. The Company obtained substantial ability to control VIEs and VIE’s subsidiary through a series of contractual agreements entered into among Beijing Miyuan, VIEs and their respective legal shareholders and VIE’s subsidiary.

The Group adopted Financial Accounting Standard Board (the “FASB”) guidance on consolidating variable interest entities which require certain variable interest entities to be consolidated by the primary beneficiary of the entity. Management evaluated the relationships among Beijing Miyuan, VIEs and their legal shareholders, and VIE’s subsidiary, and concluded that Beijing Miyuan is the primary beneficiary of VIEs and VIE’s subsidiary as Beijing Miyuan is entitled to substantially all the economic risks and rewards of VIEs and VIE’s subsidiary, and has the power to direct the activities that most significantly impact the economic performance of VIEs and VIE’s subsidiary. As a result, VIEs’ and VIE’s subsidiary’s results of operations, assets and liabilities have been included in the Group’s consolidated financial statements.

The assignment agreements and contractual agreements entered into on March 1, 2014 were accounted for as reorganizations of businesses under common control in a manner similar to a pooling of interests. Accordingly, the Group continued to include the financial statements of VIEs and VIE’s subsidiary in its consolidated financial statements after the transfer.

The following is a summary of the contractual agreements entered into among Beijing Miyuan, VIEs and their respective legal shareholders, and VIE’s subsidiary. The contractual agreements among Beijing Miyuan and Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders and Jiayuan Shanghai Center are substantially the same as those contractual agreements among Shanghai Miyuan and Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders, and Jiayuan Shanghai Center before the transfer on March 1, 2014. (Note 2(a)).

(a)Contractual arrangements among Beijing Miyuan, its respective VIEs, VIE’s subsidiary and their legal shareholders

Exclusive technology license and service agreements

Pursuant to the exclusive technology license and service agreement entered into on August 13, 2012 between Beijing Miyuan and Beijing Aizhenxin and the amended and restated exclusive technology license and service agreement entered into on March 1, 2014 among Beijing Miyuan, Shanghai HQS, Jiayuan Shanghai Center,  Beijing HQS and Xique, Shanghai HQS,  Jiayuan Shanghai Center,  Beijing HQS,  Xique and Beijing Aizhenxin retain Beijing Miyuan as their exclusive provider of software and hardware licenses, technology support, hardware and data maintenance and updates, software development, maintenance and updates, professional training, information collection and research, technology consulting services related to the business operations of Shanghai HQS,  Jiayuan Shanghai Center,  Beijing HQS,  Xique and Beijing Aizhenxin. As consideration for such services, Shanghai HQS,  Jiayuan Shanghai Center,  Beijing HQS,  Xique and Beijing Aizhenxin agreed to pay service fees equal to a certain percentage of their annual revenues as agreed by the parties from time to time. The aforementioned exclusive technology license and service agreements between Beijing Miyuan and Shanghai HQS, Beijing Miyuan and Beijing HQS, Beijing Miyuan and Xique, Beijing Miyuan and Beijing Aizhenxin, Beijing Miyuan and Jiayuan Shanghai Center will expire on January 24, 2021, February 16, 2021, February 16, 2021, August 12, 2022 and January 24, 2021, respectively; and, except by mutual agreement upon early termination by the parties in writing, the term of these agreements will be automatically extended for ten years.

Loan agreements

Pursuant to the loan agreement entered into on August 13, 2012 between Beijing Miyuan and the legal shareholders of Beijing Aizhenxin and the amended and restated relevant loan agreements entered into on March 1, 2014 between Beijing Miyuan and the legal shareholders of Shanghai HQS, Beijing HQS and Xique, respectively, Beijing Miyuan have granted interest-free loans of US$1,200 and RMB9,000, RMB1,000, RMB1,000 and RMB20,000 to legal shareholders of Shanghai HQS, Beijing HQS,  Xique and Beijing Aizhenxin, respectively, which shall only be used for Shanghai HQS,  Beijing HQS,  Xique and Beijing Aizhenxin’s working capital. The loans are repayable on demand. If the respective legal shareholders intend to voluntarily repay the loans in whole or in part, or if Beijing Miyuan requires the shareholders to repay the loans in whole or in part, Beijing Miyuan or its designee may acquire a proportionate amount of the equity interests of Shanghai HQS,  Beijing HQS,  Xique and Beijing Aizhenxin from their shareholders for a purchase price equal to the principal amount of the repaid loans. The loans have been eliminated upon the consolidation of Shanghai HQS,  Beijing HQS,  Xique and Beijing Aizhenxin.

Exclusive purchase option agreements

Pursuant to the exclusive purchase option agreement entered into on August 13, 2012 among Beijing Miyuan, Beijing Aizhenxin and its legal shareholders and the amended and restated exclusive purchase option agreements entered into on March 1, 2014 among Shanghai HQS, Beijing HQS, Xique, their respective legal shareholders and Beijing Miyuan, Beijing Miyuan has an exclusive option to purchase, or designate another qualified individual or entity to purchase, to the extent permitted by PRC law, part or all of the equity interests in Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin owned by their shareholders. The purchase prices for the entire equity interest of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin shall be the proportionate amount of the registered capital owned by such shareholders or an amount agreed by the parties in writing, provided that, in case of any compulsory requirement by then PRC law, the purchase prices shall be the minimum prices permitted by applicable PRC law. The exclusive equity transfer option agreements remain in effect until the completion of the transfer of all the shares in accordance with the agreements.

Voting rights entrustment agreements

Pursuant to the voting right entrustment agreement entered into on August 13, 2012 among Beijing Miyuan, Beijing Aizhenxin and its legal shareholders and the amended and restated voting rights entrustment agreements entered into on March 1, 2014 among Shanghai HQS, Beijing HQS, Xique, their respective legal shareholders and Beijing Miyuan, the legal shareholders of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin grant Beijing Miyuan or its designated qualified individual or entity the right to exercise all the voting rights as provided under their then articles of association. The voting rights entrustment agreements will remain effective until January 24, 2021, February 16, 2021, February 16, 2021 and August 12, 2022, respectively. Except for mutual agreement on early termination by both parties in writing or any termination arising from Shanghai HQS, Beijing HQS, Xique, Beijing Aizhenxin or the nominee shareholders’ material breach of obligations thereunder, the term of the voting rights entrustment agreement will be automatically extended for ten years.

Equity pledge agreements

Pursuant to the equity pledge agreement entered into on August 13, 2012 between Beijing Miyuan and the legal shareholders of Beijing Aizhenxin and the amended and restated equity pledge agreements entered into on March 1, 2014 between Beijing Miyuan and their respective legal shareholders of Shanghai HQS, Beijing HQS and Xique, the legal shareholders of Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin pledge all of their respective equity interests in Shanghai HQS, Beijing HQS, Xique and Beijing Aizhenxin to Beijing Miyuan to secure their obligations under the exclusive technology license and service agreements, the loan agreements, the exclusive equity transfer option agreements and the voting rights entrustment agreement, each as described above. The equity pledge agreements will expire when Shanghai HQS, Beijing HQS, Xique, Beijing Aizhenxin and their shareholders have fully performed their obligations under the agreements described above.

Cooperative Operation Agreement

Pursuant to the amended and restated cooperative operation agreement entered into on March 1, 2014 among Beijing Miyuan, Shanghai HQS and Jiayuan Shanghai Center, in order to ensure Jiayuan Shanghai Center’s ability to make payments to Beijing Miyuan under the amended and restated exclusive technology license and service agreement between Jiayuan Shanghai Center and Beijing Miyuan, Shanghai HQS agrees to appoint designees of Beijing Miyuan as the members of the management committee and the key employees of Jiayuan Shanghai Center upon the request of Beijing Miyuan. This agreement will expire on January 24, 2021 and, unless terminated early by Beijing Miyuan, the term will be automatically extended for ten years.

Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs, and can have assets transferred freely out of the VIEs without any restrictions. Therefore the Company considers that there is no asset of a consolidated VIE that can be used only to settle obligations of the VIE, except for the registered capital of the VIEs amounting to a total of RMB32,500 as of December 31, 2014. As all the consolidated VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the consolidated VIEs.

Currently there is no contractual arrangement that could require the Company to provide additional financial support to the consolidated VIEs. As the Company is conducting certain business in the PRC mainly through the VIEs, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a potential loss.

Please refer to Note 4(a) for the risks relating to the VIE arrangements and the impact of the VIEs on the Company’s financial performance.

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Business Combination (Details) In Thousands, unless otherwise specified				0 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 10, 2012 Juedui 100 CNY	Dec. 10, 2012 Juedui 100 CNY	Dec. 10, 2012 Juedui 100 Brand name CNY	Dec. 10, 2012 Juedui 100 Customer relationships CNY	Dec. 10, 2012 Juedui 100 Source code CNY
Acquisition of The Juedui 100 Business
Purchase consideration				5,500
Identifiable intangible assets						2,141	1,637	933
Identifiable assets acquired					4,711
Goodwill	127	789	789		789
Cash consideration					5,500

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Net Income Per Share (Tables)

12 Months Ended

Dec. 31, 2014

Net Income Per Share

Schedule of basic and diluted net income per share

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Numerator:
Net income	58,937	63,656	20,107
Denominator:
Weighted average number of ordinary shares outstanding—basic	46,297,314	44,910,676	44,423,885
Dilutive effect of share options	1,445,784	917,246	966,924
Weighted average number of ordinary shares outstanding—diluted	47,743,098	45,827,922	45,390,809
Basic net income per share	1.27	1.42	0.45
Diluted net income per share	1.23	1.39	0.44

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events

Subsequent Events

22.Subsequent Events

a)On February 26, 2015, the Company granted 427,500 restricted shares to one director and certain of its key employees. These restricted shares will vest over a four-year service period, with 25% of the restricted shares subject to vesting on the first anniversary of the date of grant and the remaining 75% subject to vesting in twelve quarterly installments.

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Restricted Net Assets

12 Months Ended

Dec. 31, 2014

Restricted Net Assets

Restricted Net Assets

21.Restricted Net Assets

Relevant PRC laws and regulations permit payments of dividends by the Company’s subsidiaries, VIEs and VIE’s subsidiary in China only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company’s subsidiaries, VIEs and VIE subsidiary in China are required to make certain appropriation of net after-tax profits or increase in net assets to the statutory surplus fund (see Note 3(s)) prior to payment of any dividends. As a result of these and other restrictions under PRC laws and regulations, the Company’s subsidiaries, VIEs and VIE’s subsidiary in China are restricted in their ability to transfer their net assets to the Company in terms of cash dividends, loans or advances, which restricted portion amounted to approximately RMB120,528 and RMB113,771 as of December 31, 2013 and 2014, respectively. As of December 31, 2013 and 2014, the retained earnings balance of the Group’s PRC entities after appropriation to statutory reserves, as determined under PRC GAAP, was RMB219,876 and RMB262,568, respectively. Even though the Company currently does not require any such dividends, loans or advances from the PRC subsidiaries or VIEs for working capital and other funding purposes, the Company may in the future require additional cash resources from the Company’s subsidiaries, VIEs and VIE’s subsidiary in China due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends to make distributions to shareholders. Except for the above, there is no other restriction on use of proceeds generated by the Company’s subsidiaries, VIEs and VIE’s subsidiary to satisfy any obligations of the Company.

The Company performed a test on the restricted net assets of its consolidated subsidiaries, VIEs and VIE’s subsidiary (the “restricted net assets”) in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e)(3), “General Notes to the Financial Statements” and concluded that it was applicable for the Company to disclose the condensed financial information for the parent company for the year ended December 31, 2014. For the purposes of presenting parent only financial information, the Company records its investments in its subsidiaries and VIEs under the equity method of accounting. Such investments are presented on the separate condensed balance sheets of the Company as “Investments in subsidiaries and VIEs” and the profit of the VIEs is included in “Share of income of subsidiaries and VIEs” in the condensed statement of comprehensive income.

The subsidiaries did not pay any dividends to the Company for the years presented. Certain information and footnote disclosures generally included in financial statements prepared in accordance with US GAAP have been condensed and omitted. The footnote disclosures represent supplemental information relating to the operations of the Company, as such, these information should be read in conjunction with the notes to the consolidated financial statements of the Group.

As of December 31, 2013 and 2014, the Company had no significant capital and other commitments, long-term obligations, or guarantee.

The Company’s accounting policies are the same as the Group’s policies with the exception of the accounting for the investments in subsidiaries and VIE.

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED BALANCE SHEETS

AS OF DECEMBER 31, 2013 AND 2014

(All amounts in thousands)

	As of December 31,
	2013		2014		2014
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents	73,365		58,342		9,403
Short-term deposits	177,319		9,466		1,526
Prepaid expenses and other current assets	8,000		7,955		1,282
Total current assets	258,684		75,763		12,211
Non-current assets:
Investments in subsidiaries and VIEs	286,455		316,253		50,971
Total assets	545,139		392,016		63,182
LIABILITIES
Current liabilities:
Accrued expenses and other current liabilities, current portion	5,921		4,976		802
Total current liabilities	5,921		4,976		802
Total liabilities	5,921		4,976		802
SHAREHOLDERS’ EQUITY
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized as of December 31, 2013 and 2014; 49,030,944 shares issued and outstanding as of December 31, 2013; 49,930,944 shares issued and outstanding as of December 31, 2014)	349		354		57
Additional paid-in capital	506,458		358,768		57,823
Less: Treasury shares (4,145,729 and 5,310,240 shares as of December 31, 2013 and 2014, respectively)	(91,100	)	(117,480	)	(18,934	)
Statutory reserves	9,974		10,103		1,628
Retained earnings	126,367		146,345		23,587
Accumulated other comprehensive loss	(12,830	)	(11,050	)	(1,781	)
Total shareholders’ equity	539,218		387,040		62,380
Total liabilities and shareholders’ equity	545,139		392,016		63,182

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(All amounts in thousands)

	For the Year Ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
Operating expenses:
General and administrative expenses	(6,443	)	(4,461	)	(3,369	)	(543	)
Total operating expenses	(6,443	)	(4,461	)	(3,369	)	(543	)
Operating loss	(6,443	)	(4,461	)	(3,369	)	(543	)
Share of income of subsidiaries and VIEs	59,671		61,151		20,251		3,264
Interest income	6,595		4,329		4,147		668
Foreign currency exchange (loss)/income, net	(1,829	)	2,239		(1,536	)	(248	)
Other income, net	943		398		614		99
Income before income tax	58,937		63,656		20,107		3,240
Income tax expenses	—		—		—		—
Net income	58,937		63,656		20,107		3,240
Net income	58,937		63,656		20,107		3,240
Other comprehensive (loss)/income:
Foreign currency translation adjustments, net of tax of RMB nil	(775	)	(9,083	)	1,799		290
Share of other comprehensive income/(loss) of subsidiaries and VIEs, net of tax of RMB nil	3		65		(19	)	(3	)
Other comprehensive (loss)/income	(772	)	(9,018	)	1,780		287
Comprehensive income	58,165		54,638		21,887		3,527

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014

(In thousands)

	For the Year Ended December 31,
	2012		2013		2014		2014
	RMB		RMB		RMB		US$
Cash flows provided by operating activities	26,046		519		491		79
Cash flows provided by/(used in) investing activities	146,504		(23,823	)	167,853		27,053
Cash flows used in financing activities	(57,660	)	(73,234	)	(183,627	)	(29,595	)
Effect of exchange rate changes on cash and cash equivalents	(2,604	)	(6,844	)	260		42
Net increase/(decrease) in cash and cash equivalents	112,286		(103,382	)	(15,023	)	(2,421	)
Cash and cash equivalents at beginning of year	64,461		176,747		73,365		11,824
Cash and cash equivalents at end of year	176,747		73,365		58,342		9,403

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Fair Value Measurements (Details) In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2014 Recurring Basis Significant other observable inputs (Level 2) CNY	Dec. 31, 2013 Recurring Basis Significant other observable inputs (Level 2) CNY	Dec. 31, 2014 Recurring Basis Total fair value and carrying value on balance sheet CNY	Dec. 31, 2013 Recurring Basis Total fair value and carrying value on balance sheet CNY
Assets measured on recurring basis
Cash equivalents				196,810	232,458	196,810	232,458
Short-term deposits	38,595	239,466	336,299	239,466	336,299	239,466	336,299
Available-for-sale securities				15,715	5,233	15,715	5,233

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies

Schedule of future minimum payments under non-cancellable operating leases with initial terms in excess of one year

Future minimum payments under non-cancellable operating leases with initial terms in excess of one year consist of the following at December 31, 2014:

	Amount
	RMB
Year ending December 31,
2015	8,463
2016	5,382
2017	450
2018 and thereafter	—
Total	14,295

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies

Basis of presentation and consolidation

a)Basis of presentation and consolidation

The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries and its VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and its VIEs have been eliminated upon consolidation. The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Group in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers, or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.

A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, has controlling financial interest of the entity. The Company or its subsidiary is considered to be the primary beneficiary if the Company or its subsidiary has the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

In determining whether the Company or its subsidiaries are the primary beneficiary of the VIEs, the Company considered whether it has the power to direct activities that are significant to Shanghai HQS, Beijing HQS, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center’s economic performance, including the power to appoint senior management, right to direct company strategy, power to approve capital expenditure budgets, and power to establish and manage ordinary business operation procedures and internal regulations and systems.

There are no entities where the Company has a variable interest but is not the primary beneficiary.

Use of estimates

b)Use of estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of the assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results may differ from those estimates.

Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include the useful lives of property and equipment and intangible assets, impairment assessments for property and equipment, intangible assets,   goodwill, investment in equity investee, allowance for doubtful accounts, valuation allowance of deferred tax assets, relative values of revenue elements of service packages, estimation of payments collected by wireless value-added services (“WVAS”) partners and determination of share-based compensation expenses. In addition, the Group uses assumptions in the valuation model to estimate the fair value of share options granted and modified. The Group bases its estimates of the carrying value of certain assets and liabilities on the historical experience and on other various factors that it believes to be reasonable under the circumstances, when the carrying values are not readily available from other sources.

Convenience translation

c)Convenience translation

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from Renminbi (“RMB”) into United States dollars (“US$”) as of and for the year ended December 31, 2014 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.2046, representing the rate as certified by the H.10 weekly statistical release of Federal Reserve Board on December 31, 2014. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2014, or at any other rate.

Cash and cash equivalents

d)Cash and cash equivalents

Cash and cash equivalents represent cash on hand, demand deposits and highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash.

Term deposits

e)Term deposits

Term deposits represent time deposits placed with banks. Deposits with original maturities of one year or less are reported as current assets while deposits with original maturities of more than one year are reported as non-current assets. Interest earned is recorded as interest income in the consolidated statements of comprehensive income during the periods presented.

Available-for-sale securities

f)Available-for-sale securities

Investments in financial instruments with variable interest rates indexed to the performance of underlying assets are classified as available-for-sale securities. Available-for-sale securities are measured at fair value at the date of initial recognition and subsequently carried at fair value. To estimate fair value, the Group refers to the quoted rate of return provided by banks at the end of each reporting period. Changes in fair value are reflected in the consolidated statement of comprehensive income. Dividend and realized gains and losses upon sale of the available-for-sale securities are recognized as other income.

Accounts receivable and allowance for doubtful accounts

g)Accounts receivable and allowance for doubtful accounts

Accounts receivable mainly represents the amounts due from WVAS partners with whom the Group has entered into agreements for users to purchase the services of the Group and amounts due from offline events sponsors. An allowance for doubtful debts is provided based on an ageing analysis of accounts receivable balances, historical bad debt rates, repayment patterns and credit analysis. The Group also makes a specific allowance if there is evidence showing that the receivable is likely to be irrecoverable, and assesses the probability of recovery on an annual basis. Accounts receivable in the consolidated balance sheet were stated net of such provisions. The allowance for doubtful accounts was RMB110, RMBnil and RMB1,130 for the year ended December 31, 2012, 2013 and 2014, respectively.

Property and equipment

h)Property and equipment

Property and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is provided on a straight-line basis over the following estimated useful lives:

	Estimated useful lives
Office building	30 years
Office building improvements	10 years
Computer and software	3 years
Furniture, fixture and other equipment	3 years
Motor vehicles	4 years
Leasehold improvements	Shorter of lease term or estimated useful lives of assets

Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of the property and equipment, are expensed as incurred. Gains and losses from the disposal of property and equipment are included in income from operations.

Goodwill

i)Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Group’s business combinations.

In accordance with FASB guidance for goodwill and other intangible assets, goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Group completes a two-step goodwill impairment test at each year end date. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value reporting unit over the amount assigned to the assets and liabilities. This allocation process is only performed for the purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value over the implied fair value of goodwill.

The Group did not incur any impairment loss on goodwill during any of the periods presented.

Intangible assets

j)Intangible assets

Intangible assets consist of acquired intangible assets with finite lives as a result of the Group’s business combination and the acquired domain names, and are carried at cost less accumulated amortization. Amortization is computed using the straight-line method over the following estimated useful lives of the intangible assets:

	Estimated useful lives
Trademarks and domain names	10 years
Customer relationships	5 years
Source code	10 years

Impairment of long-lived assets and intangible assets

k)Impairment of long-lived assets and intangible assets

The carrying amount of long-lived assets and intangible assets are reviewed for impairment whenever events or changes in the circumstances indicate that the carrying value of an asset may not be recoverable. The Group assesses the recoverability of the long-lived assets and intangible assets by comparing the carrying amount of assets to the estimated future undiscounted cash flows expected to be generated by the assets. Such assets are considered to be impaired if the sum of the expected undiscounted cash flow is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets or intangible assets was recognized for any of the periods presented.

Investment in equity investee

l)Investment in equity investee

Equity investment represents the Group’s investment in a private-owned company. For any equity investment that is not considered as debt security or equity security and that neither has readily determinable fair values nor is considered in-substance common stock, the cost method is used.

Under the cost method, the Group carries the investment at cost and recognizes income to the extent of dividends received from the distribution of the equity investee’s post-acquisition profits.

The Group continually reviews its investment in equity investee to determine whether a decline in fair value below the carrying value is other than temporary. The primary factors the Group considers in its determination are the length of time that the fair value of the investment is below the Group’s carrying value; the financial condition, operating performance and the prospects of the equity investee; and other company specific information such as recent financing rounds. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down to fair value. No impairment of investment in equity investee was recognized for the year ended December 31, 2014.

Revenue recognition and deferred revenue

m)Revenue recognition and deferred revenue

Revenue is recognized when persuasive evidence of an arrangement exists, service has been rendered, the price is fixed or determinable and collection is reasonably assured. Revenue is deferred until these criteria are met as described below.

Revenues presented in the consolidated statement of comprehensive income include revenues from online services, personalized matchmaking services, and events and other services.

Online services revenue

The Group offers two types of online services through its online platforms, including message exchanging services and value-added services. Users prepay for virtual currencies that can be used as consideration for the Group’s online services. The Group charges for message exchanging services when one registered user initiates contact with another registered user via the Group’s online platform, and either the sender or recipient may pay for the service. Subsequently, the Group does not charge for any message exchanges between the same two users. Based on the Group’s historical data, the exchange between two users on its online platform typically lasted only a few days. The Group believes that users place the most value on the initial connection, and that users are interested in further interactions after exchanging personal contact information to communicate with each other directly. The Group also offers value-added online services, including sending virtual gifts, improved search rankings and online chatting.

The Group has adopted two primary fee models for the online services: a pay-per-use model and a periodic subscription model. Online services offered under the pay-per-use model include improved search rankings for the duration of one day, message sending or receiving and sending virtual gifts. As the Group provides these services within a short period of time, revenue is recognized when the virtual currencies are used and services are rendered. If the communication patterns of the users change, the timing of the Group’s revenue recognition for these services may be impacted and revenue may be deferred and recognized over a longer period. The Group’s virtual currencies purchased by users that have yet to be used are initially recorded as deferred revenue.

Under the periodic subscription model, users pay a fixed subscription fee for certain services which are delivered over a predetermined subscription period. Online services offered under the subscription model include sending multiple messages a day, reading unlimited number of messages, improved search rankings for a period longer than a day, unlimited online chatting and premium user subscriptions. Fees for subscription services are collected upfront and initially recognized as deferred revenue, and revenue is recognized proportionately over the applicable subscription periods as services are rendered.

The Group’s virtual currencies can be purchased through the Group’s online platform, where the payment is collected through online payment platforms, or through the Group’s WVAS partners. The Group’s WVAS partners offer a payment method by charging services to the customer’s telephone bills, collecting payment from the users and remitting the cash to the Group after payment is collected. Due to the time lag between when the services are rendered and billing statements are provided by the WVAS partners, revenues from the Group’s virtual currencies sold through such channel is estimated based on the Group’s internal billing records and billing confirmations with the WVAS partners. The Group adjusts its revenue recognition for prior periods’ confirmation rates and prior periods’ discrepancies between internally estimated revenues and actual revenues confirmed by the WVAS partners. There were no significant difference between the Group’s estimates and the WVAS partners’ billing statements for all the periods presented.

Revenue from virtual currencies sold through the WVAS partners are recognized on a gross basis as the Group is considered the primary obligor in the arrangements. The Group is also responsible for designing, developing and implementing the online services, and bears credit risks associated with uncollectible fees. In addition, the Group determines the price and the WVAS partners earn only a fixed percentage of commission fees. The amounts attributed to the WVAS partners are determined pursuant to the arrangements between the Group and the WVAS partners, and are recognized as costs of revenues. Such cost of revenues amounted to RMB49,923, RMB61,881 and RMB65,997 for the years ended December 31, 2012, 2013 and 2014, respectively.

The Group also offers web-based games and mobile games under an item-based revenue model, where the basic game play functions are free of charge and players are charged for purchases of in-game virtual items or game points. Revenues of games business are included in online service revenue.

For web-based games, the Group cooperates with third-party game developers by entering into cooperation agreements with them. The web-based games designed, developed and hosted by these developers are made available to the players through the Group’s platforms. The Group views that the developers are primarily responsible for the operation of web-based games to the players. The Group generally collects payments from players in connection with the sale of in-game virtual items and remits certain agreed-upon percentages of the proceeds to the game developers and records revenue net of such remittances. Revenue is recognized when the in-game virtual items are consumed.

For mobile games, the Group is primarily responsible for the operation and sells game points to players through third party mobile application stores. The mobile application stores remit the proceeds to the Group after deducting certain agreed-upon percentages of commission fees. Revenue from the sale of game points is recorded gross of the commission fees paid to mobile application stores and is recognized when the game points are consumed.

Personalized matchmaking services revenue

The Group provides personalized matchmaking services to individual users, which generally consist of unlimited access to certain online services, tickets to a number of events, personalized communications, provision of detailed background checks, dating and relationship consultation and advice and search services provided by the Group’s customer service representatives in a specified contractual period. The Group provides various personalized matchmaking services throughout the contract period on an as-needed basis. When the Group enters into a personalized matchmaking service contract with an individual user, the Group is unable to determine or estimate the volume of each separate service to be provided to the particular user. Different types of services under such personalized bundled contracts are to be provided gradually over the contract period, and as such, the Group accounts for the personalized matchmaking services as a single unit of accounting on a contract basis. Starting from 2013, the Group entered into business arrangements with matchmaking service agencies for providing personalized matchmaking services in the PRC. The Group grants matchmaking service agencies limited rights to use the Group’s brand, trademark and certain resources under the direction of the Group in accordance with the agency agreements. The Group collects upfront payments from the users and remits the commission fees to the matchmaking service agencies at the pre-determined rates pursuant to the agreements between the Group and the matchmaking service agencies. The Group is responsible for the determination of the service scope and price, and the signing of the service agreements and the collection of service fees from customers directly. Revenue from users obtained through matchmaking service agencies are recognized on a gross basis as the Group is considered the primary obligor in the service arrangements.

Payments for personalized matchmaking services are collected upfront and initially recorded as deferred revenue, and revenue is recognized ratably over the contract service period. In addition, there are training fees charged upfront to the matchmaking service agencies, which are recognized as revenue when the training services are rendered.

Contracts for personalized matchmaking services may be terminated at any time at the user’s sole discretion during the contractual period. It is the Group’s policy to refund 80% of the contract payment to the user only if termination takes place within the initial seven days. The Group recognizes all deferred revenue remaining, after deducting the cash refund, if any, from the contract at the time of termination.

Events and other services revenue

The Group earns revenue from organizing and hosting events, including speed-dating, dance parties, and other social events for its users. Speed dating is an organized form of matchmaking that focuses on meeting multiple potential romantic partners over the course of a single event. Tickets are generally sold at the events, and revenue is recognized upon the conclusion of the events when services have been rendered. For certain events where tickets are prepaid by the users, prepaid fees are initially recorded as deferred revenue and revenue is recognized upon the completion of the events. Events services revenue also include the revenue from event sponsorship arrangements whereby third-party companies enter into agreements with the Group to sponsor a particular offline event and the revenue from event sponsorship arrangements are recognized upon the completion of the sponsored event.

Other services revenue mainly represents revenues from online advertising. Revenue from online advertising is principally derived from advertising arrangements that allow advertisers to place advertisements on particular areas of the Group’s websites, in particular formats and over a particular period of time. The Group enters into advertising contracts which are signed to establish the fixed price for the advertising arrangements to be provided, and payment is collected upfront and initially recognized as deferred revenue. Revenues from advertising-related arrangements are recognized on a straight-line basis over the contractual period.

Customer loyalty program

n)Customer loyalty program

Registered users earned loyalty points based on their activities on the Group’s platform and/or purchase of online services, which could be used to redeem online services once a minimum number of points had been accumulated. The Group considered loyalty points awarded for the purchase of online services to be part of its revenue generating activities, and such arrangements were considered to have multiple elements. Under the applicable guidance, total consideration was allocated to the purchased services and loyalty points based on the relative selling price of the purchased services and redeemable services. In determining the best estimated selling price of each loyalty point, the Group considered the selling price of the underlying services if they were not redeemed using loyalty points and the average number of loyalty points needed to redeem each type of service. Consideration allocated to the loyalty points was initially recorded as deferred revenue, and revenue was recognized when the points were redeemed and services were rendered. In 2013, the Group suspended the customer loyalty program. All the loyalty points expired in 2013 and the Group recognized the deferred revenue accordingly.

For the years ended December 31, 2012, 2013 and 2014, revenue recognized from loyalty points amounted to RMBnil, RMB4,917 and RMBnil, respectively. All the loyalty points expired in 2013 and the deferred revenue balance in relation to the customer loyalty program amounted to RMBnil as of December 31, 2013 and thereafter.

Cost of revenues

o)Cost of revenues

Cost of revenues primarily consists of commission fees paid to the WVAS partners for money collection, salaries and wages, network costs, depreciation of property and equipment, rental expenses of premises and facilities and commission fees paid to personalized matchmaking service agencies.

Share-based compensation

p)Share-based compensation

The Company grants share options and restricted shares to eligible employees and directors under a share incentive plan. The awards are measured at the grant date fair value and are recognized as an expense using the graded vesting method, net of estimated forfeiture rate. The Company recognizes awards with service condition terms only over the requisite service period, which is generally the vesting period.

Income taxes

q)Income taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current year. Deferred tax liabilities and assets for the future tax consequences of events are also recognized in the Group’s financial statements or tax returns.

Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized.

The PRC tax regulations impose a 10% withholding income tax for dividends distributed by foreign invested enterprises to their immediate holding companies outside the PRC. A lower withholding tax rate will be applied if there is a tax treaty arrangement between mainland China and the jurisdiction of the foreign holding company. A holding company in Hong Kong, for example, will be subject to a 5% withholding tax rate under the Arrangement Between the PRC and Hong Kong on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital if such holding company is considered a non-PRC resident enterprise and holds at least 25% of the equity interests in the PRC foreign invested enterprise distributing the dividends, subject to approval of the PRC local tax authority. However, if the Hong Kong holding company is not considered to be the beneficial owner of such dividends under applicable PRC tax regulations, such dividend will remain subject to a withholding tax rate of 10%.

The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement of comprehensive income. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2012, 2013 and 2014. As of December 31, 2014, the Group did not have any significant unrecognized uncertain tax positions.

Employee benefit expenses

r)Employee benefit expenses

All eligible employees of the Group are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group has no further payment obligations once the contributions have been paid.

The Group recorded employee benefit expenses of RMB14,005, RMB17,568 and RMB20,553 for the years ended December 31, 2012 and 2013 and 2014, respectively.

Statutory reserves

s)Statutory reserves

The Group’s subsidiaries, VIEs and VIE’s subsidiary established in the PRC are required to make appropriations to certain non-distributable reserve funds.

In accordance with the laws applicable to China’s Foreign Investment Enterprises, the Group’s subsidiaries registered as wholly-owned foreign enterprise has to make appropriations from its after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by the Ministry of Finance of the People’s Republic of China (“PRC GAAP”)) to reserve funds including general reserve fund, and staff bonus and welfare fund.

The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the company. Appropriation to the staff bonus and welfare fund is at the company’s discretion.

In addition, in accordance with the China Company Laws, the VIEs of the Company registered as a PRC domestic company must make appropriations from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund and a discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits as determined under PRC GAAP. Appropriation is not required if the surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company.

The use of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increases the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to staff and for the collective welfare of employees. All these reserves are not allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation.

For the years ended December 31, 2012, 2013 and 2014, RMB3,710, RMB472 and RMB129 were appropriated to the statutory reserves, respectively.

Research and development costs

t)Research and development costs

Research and development costs include expenses incurred by the Company to develop, maintain and manage the Company’s platforms. These expenses are mainly comprised of salaries, employee benefits and other headcount-related costs associated with the research and development department. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair and maintenance of the existing platforms. Costs incurred in the development phase are capitalized and amortized over the estimated product life.

During the periods presented, the amount of costs qualifying for capitalization was not significant and as a result, the Group expensed all research and development costs as incurred.

Advertising expenses

u)Advertising expenses

Advertising expenses, which generally reflect the cost of promotions to create or stimulate a positive image of the Group or a desire to obtain the Group’s services, are expensed as incurred. Advertising costs included in selling and marketing expense were RMB69,966, RMB71,498 and RMB105,636 for the years ended December 31, 2012, 2013 and 2014, respectively.

Operating lease

v)Operating lease

Leases where substantially all the risks and rewards of ownership of the assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of comprehensive income on a straight line basis over the lease periods.

Government subsidies

w)Government subsidies

Government subsidies represent discretionary cash subsidies granted by the local government to encourage the development of certain enterprises that are established in the local economic region. The cash subsidies are recognized as other income when there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Foreign currency translation

x)Foreign currency translation

The Group uses the RMB as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in the British Virgin Islands and Hong Kong is the US$, while the functional currency of the Group’s other subsidiaries, VIEs and VIE’s subsidiary incorporated and operated in the PRC is the RMB.

In the consolidated financial statements, the financial information of the Company and its subsidiaries which use US$ as their functional currency, has been translated into RMB. Assets and liabilities are translated from each subsidiary’s functional currency at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated using the average rate for the year. Gains and losses resulting from foreign currency translation to reporting currency are recorded in accumulated other comprehensive income in the consolidated statements of comprehensive income for the years presented.

Net income per share and per American Depository Share ("ADS")

y)Net income per share and per American Depository Share (“ADS”)

Basic net income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the year. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of non-vested restricted shares and shares issuable upon the exercise of stock options (using the treasury stock method). Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such shares would be anti-dilutive.

Basic and diluted net income per ADS is computed based on net income and the corresponding basic and diluted number of ADSs, assuming that, during each period presented, every two ADSs represent three ordinary shares of the Company.

Comprehensive income

z)Comprehensive income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding those resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, consists of the accumulated foreign currency translation adjustments.

Recent accounting pronouncements

aa)Recent accounting pronouncements

On May 28, 2014, the FASB and IASB issued their converged standard on the recognition of revenue from contracts with customers. The standard is intended to improve the financial reporting of revenue and improve comparability of the top line in financial statements globally. The FASB is amending the FASB Accounting Standards Codification and creating a new Topic 606, Revenue from Contracts with Customers, to supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the amendments supersede some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. For a public entity, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is currently evaluating the impact on its consolidated financial statements of adopting this guidance.

In June 2014, under ASC 718, Compensation—Stock Compensation, the FASB issued Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. These amendments apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. That is the case when an employee is eligible to retire or otherwise terminate employment before the end of the period in which a performance target could be achieved and still be eligible to vest in the award if and when the performance target is achieved. For all entities, the amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group is currently evaluating the impact on its consolidated financial statements of adopting this guidance.

In August 2014, the FASB issued Presentation of Financial Statements — Going Concern. This standard requires management to evaluate for each annual and interim reporting period whether it is probable that the reporting entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued. If the entity is in such a position, the standard provides for certain disclosures depending on whether or not the entity will be able to successfully mitigate its going concern status. This guidance is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. The Group does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

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Principal Activities and Organization (Tables)

12 Months Ended

Dec. 31, 2014

Principal Activities and Organization

Schedule of Company's subsidiaries, VIEs and VIE's subsidiary

As of December 31, 2014, the Company’s subsidiaries, VIEs and VIE’s subsidiary included the following entities:

Name	Date of incorporation or establishment	Place of incorporation or establishment /operations	Percentage of direct or indirect economic ownership		Principal  activities
Subsidiaries
Harper Capital Inc. (“BVI Company”)	February 6, 2007	British Virgin Islands	100	%	Investment holding
Miyuan (Shanghai) Information Technology Co., Ltd. (“Shanghai Miyuan”)	April 27, 2007	PRC	100	%	Investment holding and consulting services
Jiayuan Hong Kong Corporation Limited (“Jiayuan Hong Kong”)	October 5, 2010	Hong Kong	100	%	Investment holding and overseas online dating services
Beijing Miyuan Information Technology Co., Ltd. (“Beijing Miyuan”)	January 26, 2011	PRC	100	%	Investment holding and consulting services
Variable interest entities (“VIEs”)
Shanghai Huaqianshu Information Technology Co., Ltd. (“Shanghai HQS”)	April 6, 2004	PRC	100	%	Online dating services
Beijing Huaqianshu Information Technology Co., Ltd. (“Beijing HQS”)	November 26, 2010	PRC	100	%	Online dating services and personalized matchmaking services
Beijing Shiji Xique Information Technology Co., Ltd. (“Xique”)	November 26, 2010	PRC	100	%	Online wedding planning services
Beijing Aizhenxin Information Technology Co., Ltd. (“Beijing Aizhenxin”)	August 13, 2012	PRC	100	%	Online dating services
VIE’s subsidiary
Shiji Jiayuan Matchmaking Services Center (“Jiayuan Shanghai Center”)	December 3, 2010	PRC	100	%	Events and personalized matchmaking services

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Principal Activities and Organization

12 Months Ended

Dec. 31, 2014

Principal Activities and Organization

Principal Activities and Organization

1.Principal Activities and Organization

a)Principal activities

Jiayuan.com International Ltd. (“Jiayuan”, or the “Company”), through its subsidiaries, its variable interest entities (“VIEs”), and VIE’s subsidiary (collectively, the “Group”), is principally engaged in operating online dating services in the People’s Republic of China (the “PRC” or “China”) through its online dating platforms which can be accessed through the jiayuan.com, izhenxin.com, juedui100.com, imdali.com and qiuai.com websites, wireless application protocol (“WAP”) browsers and wireless applications. The Group also hosts events and performs personalized matchmaking services to help individuals find suitable partners.

b)Organization

The Company was incorporated in the Cayman Islands on September 29, 2010.

Prior to February 2007, the Group’s business was operated through its PRC domestic company, Shanghai Huaqianshu Information Technology Co., Ltd. (“Shanghai HQS”), which was directly or indirectly, owned or controlled by Ms. Haiyan Gong, Mr. Yongqiang Qian, Mr. Xu Liu, and Ms. Jing Yang (the “Founding Shareholders”).

In February 2007, the Founding Shareholders undertook a reorganization (the “Reorganization”) and established Harper Capital Inc., an investment holding company under the laws of the British Virgin Islands (the “BVI Company”). Subsequently, in May 2007, the BVI Company established Miyuan (Shanghai) Information Technology Co., Ltd. (“Shanghai Miyuan”) as a wholly-owned foreign enterprise in the PRC. The Reorganization was necessary to comply with PRC laws and regulations which prohibit or restrict foreign ownership of companies that provide Internet content services in the PRC where licenses are required.  On January 26, 2011, the Company issued shares to the shareholders of BVI Company at an exchange ratio of one to one, or the Share Swap. After the Share Swap, BVI Company became a direct wholly-owned subsidiary.

By entering into a series of agreements among the Founding Shareholders, Shanghai HQS, Beijing Huaqianshu Information Technology Co., Ltd. (“Beijing HQS”), Beijing Shiji Xique Information Technology Co., Ltd. (“Xique”) and Shanghai Miyuan, Shanghai HQS, Beijing HQS and Xique became variable interest entities (“VIEs”) of Shanghai Miyuan and consequently, Shanghai Miyuan became the primary beneficiary of Shanghai HQS, Beijing HQS and Xique (see Note 2).

On May 16, 2011, the Company completed an initial public offering (“IPO”) of 6,700,000 American depositary shares (“ADSs”), representing 10,050,000 ordinary shares, in the NASDAQ Global Select Market. The net proceeds received by the Company from the IPO, after deducting commissions and offering expenses, amounted to approximately US$65,243. Upon the completion of the IPO, all of the Company’s then outstanding Series A redeemable convertible preferred shares (“Series A Preferred Shares”) were converted into the same number of ordinary shares.

On August 13, 2012, Beijing Miyuan Information Technology Co. Ltd. (“Beijing Miyuan”), a wholly owned foreign enterprise established by Jiayuan Hong Kong Corporation Limited (“Jiayuan Hong Kong”), entered into a series of contractual arrangements with Beijing Aizhenxin Information Technology Co., Ltd. (“Beijing Aizhenxin”), an entity incorporated in the PRC, and its legal shareholders to acquire effective control over Beijing Aizhenxin. As a result, Beijing Aizhenxin became a VIE of Beijing Miyuan. Beijing Miyuan became the primary beneficiary of Beijing Aizhenxin (see Note 2).

On March 1, 2014, Shanghai Miyuan, Beijing Miyuan, Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders and Shiji Jiayuan Matchmaking Services Center (“Jiayuan Shanghai Center”), the subsidiary of Shanghai HQS, entered into assignment agreements whereby Shanghai Miyuan transferred its obligations and rights under the contractual arrangements with Shanghai HQS, Beijing HQS, Xique and their respective shareholders and Jiayuan Shanghai Center to Beijing Miyuan. In addition, Beijing Miyuan entered into contractual agreements with Shanghai HQS, Beijing HQS, Xique and their respective legal shareholders, and Jiayuan Shanghai Center on March 1, 2014 (see Note 2).

As of December 31, 2014, the Company’s subsidiaries, VIEs and VIE’s subsidiary included the following entities:

Name	Date of incorporation or establishment	Place of incorporation or establishment /operations	Percentage of direct or indirect economic ownership		Principal  activities
Subsidiaries
Harper Capital Inc. (“BVI Company”)	February 6, 2007	British Virgin Islands	100	%	Investment holding
Miyuan (Shanghai) Information Technology Co., Ltd. (“Shanghai Miyuan”)	April 27, 2007	PRC	100	%	Investment holding and consulting services
Jiayuan Hong Kong Corporation Limited (“Jiayuan Hong Kong”)	October 5, 2010	Hong Kong	100	%	Investment holding and overseas online dating services
Beijing Miyuan Information Technology Co., Ltd. (“Beijing Miyuan”)	January 26, 2011	PRC	100	%	Investment holding and consulting services
Variable interest entities (“VIEs”)
Shanghai Huaqianshu Information Technology Co., Ltd. (“Shanghai HQS”)	April 6, 2004	PRC	100	%	Online dating services
Beijing Huaqianshu Information Technology Co., Ltd. (“Beijing HQS”)	November 26, 2010	PRC	100	%	Online dating services and personalized matchmaking services
Beijing Shiji Xique Information Technology Co., Ltd. (“Xique”)	November 26, 2010	PRC	100	%	Online wedding planning services
Beijing Aizhenxin Information Technology Co., Ltd. (“Beijing Aizhenxin”)	August 13, 2012	PRC	100	%	Online dating services
VIE’s subsidiary
Shiji Jiayuan Matchmaking Services Center (“Jiayuan Shanghai Center”)	December 3, 2010	PRC	100	%	Events and personalized matchmaking services

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies

Schedule of estimated useful lives of assets

	Estimated useful lives
Office building	30 years
Office building improvements	10 years
Computer and software	3 years
Furniture, fixture and other equipment	3 years
Motor vehicles	4 years
Leasehold improvements	Shorter of lease term or estimated useful lives of assets

Schedule of estimated useful lives of the intangible assets

	Estimated useful lives
Trademarks and domain names	10 years
Customer relationships	5 years
Source code	10 years

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Restricted Net Assets (Details 3) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2014 Parent company USD ($)	Dec. 31, 2014 Parent company CNY	Dec. 31, 2013 Parent company CNY	Dec. 31, 2012 Parent company CNY
Operating expenses:
General and administrative expenses	$ (9,359)	(58,071)	(52,565)	(54,367)	$ (543)	(3,369)	(4,461)	(6,443)
Total operating expenses	(53,824)	(333,956)	(258,102)	(215,330)	(543)	(3,369)	(4,461)	(6,443)
Operating income	361	2,245	53,983	51,788	(543)	(3,369)	(4,461)	(6,443)
Share of income of subsidiaries and VIEs					3,264	20,251	61,151	59,671
Interest income	2,846	17,658	11,687	13,323	668	4,147	4,329	6,595
Foreign currency exchange (loss)/income , net	(219)	(1,361)	1,935	(1,845)	(248)	(1,536)	2,239	(1,829)
Other income, net	737	4,572	9,104	4,898	99	614	398	943
Income before income tax					3,240	20,107	63,656	58,937
Income tax expenses	(485)	(3,007)	(13,053)	(9,227)
Net income	3,240	20,107	63,656	58,937	3,240	20,107	63,656	58,937
Net income	3,240	20,107	63,656	58,937	3,240	20,107	63,656	58,937
Other comprehensive (loss)/income:
Foreign currency translation adjustments, net of tax of RMB nil	287	1,780	(9,018)	(772)	290	1,799	(9,083)	(775)
Share of other comprehensive income/(loss) of subsidiaries and VIEs, net of tax of RMB nil					(3)	(19)	65	3
Other comprehensive (loss)/income					287	1,780	(9,018)	(772)
Comprehensive income	3,527	21,887	54,638	58,165	3,527	21,887	54,638	58,165
Tax effect of foreign currency translation adjustments		0	0	0		0	0	0
Tax effect of share of other comprehensive income/(loss) of subsidiaries and VIEs						0	0	0

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Accrued Expenses and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2014

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities

	As of December 31,
	2013	2014
	RMB	RMB
Accrued salaries and welfare	19,740	17,964
Accrued advertising expenses	2,371	2,388
Accrued network support expenses	1,908	1,801
Business and other tax payable	3,304	4,093
Professional and other service fees	6,556	9,262
Deposits received from matchmaking service agencies	2,850	8,980
Others	5,616	6,652
Balance as at December 31	42,345	51,140
Less: Current portion	39,615	45,490
Non-current portion	2,730	5,650

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Summary of Significant Accounting Policies (Details 4) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statutory Reserves
Minimum percentage appropriation to general reserve fund required	10.00%
Reserve level threshold for mandatory appropriation requirement (as a percent)	50.00%
Minimum percentage appropriation to statutory surplus fund required	10.00%
Surplus fund threshold for mandatory appropriation requirement (as a percent)	50.00%
Appropriation to statutory reserves	129	472	3,710
Advertising expenses
Advertising costs included in selling and marketing expenses	105,636	71,498	69,966

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Ordinary Shares and Treasury Shares (Details) In Thousands, except Share data, unless otherwise specified	12 Months Ended					1 Months Ended			12 Months Ended
	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Nov. 30, 2013 ADSs	Dec. 31, 2012 ADSs USD ($)	Dec. 31, 2011 ADSs USD ($)	Dec. 31, 2014 ADSs USD ($)	Dec. 31, 2013 ADSs USD ($)	Dec. 31, 2012 ADSs USD ($)	Dec. 31, 2014 Ordinary shares	Dec. 31, 2013 Ordinary shares	Dec. 31, 2012 Ordinary shares
Ordinary Shares and Treasury Shares
Ordinary shares, shares authorized				100,000,000	100,000,000
Ordinary shares, par value (in dollars per share)				$ 0.001	$ 0.001
Ordinary shares, shares issued				49,930,944	49,030,944
Ordinary shares issued to depository for issuance of ADS upon the exercise of options				592,097	339,366
Treasury shares
Aggregate value of ADS authorized to be repurchased under share repurchase plan							$ 10,000	$ 10,000			$ 10,000
Period of share repurchase plan						12 months	1 year	1 year
ADSs repurchased under share repurchase plan (in shares)									776,341	931,593	2,004,526
Aggregate value of ADS repurchased under share repurchase plan (in dollars)	26,380	33,097	63,702						$ 4,287	$ 5,359	$ 10,076
Shares cancelled												0	0	258,450
Ordinary shares repurchased but not cancelled				5,310,240	4,145,729							5,310,240

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CONSOLIDATED BALANCE SHEETS In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY
Current assets:
Cash and cash equivalents	$ 31,728	196,857	232,613
Short-term deposits	38,595	239,466	336,299
Available-for-sale securities	2,533	15,715	5,233
Accounts receivable, net	6,083	37,745	33,987
Deferred tax assets	1,448	8,982	3,628
Prepaid expenses and other current assets	10,718	66,501	23,695
Total current assets	91,105	565,266	635,455
Non-current assets:
Investment in equity investee	1,781	11,048
Property and equipment, net	14,778	91,694	99,484
Intangible assets, net	582	3,610	4,275
Goodwill	127	789	789
Other non-current assets	167	1,039
Total assets	108,540	673,446	740,003
Current liabilities:
Accounts payable (including accounts payable of the consolidated variable interest entities and VIE's subsidiary without recourse to the Company of RMB5,864 and RMB20,692 as of December 31, 2013 and 2014, respectively)	3,335	20,692	5,864
Deferred revenue, current portion (including deferred revenue, current portion of the consolidated variable interest entities and VIE's subsidiary without recourse to the Company of RMB125,391and RMB 189,018 as of December 31, 2013 and 2014, respectively)	30,464	189,018	125,391
Accrued expenses and other liabilities, current portion (including accrued expenses and other current liabilities, current portion, of the consolidated variable interest entities and VIE's subsidiary without recourse to the Company of RMB34,843 and RMB38,243 as of December 31, 2013 and 2014, respectively)	7,332	45,490	39,615
Income tax payable (including income tax payable of the consolidated variable interest entities and VIE's subsidiary without recourse to the Company of RMB20,606 and RMB16,927 as of December 31, 2013 and 2014, respectively)	3,068	19,037	22,226
Total current liabilities	44,199	274,237	193,096
Non-current liabilities:
Deferred revenue, non-current portion (including deferred revenue, non-current portion, of the consolidated variable interest entities and VIE's subsidiary without recourse to the Company of RMB369 and RMB2 as of December 31, 2013 and 2014, respectively)	0	2	369
Accrued expenses and other liabilities, non-current portion (including other non-current liabilities of the consolidated variable interest entities and VIE's subsidiary without recourse to the Company of RMB 2,730 and RMB5,650 as of December 31, 2013 and 2014, respectively)	911	5,650	2,730
Deferred tax liability	1,050	6,517	4,590
Total liabilities	46,160	286,406	200,785
Commitments and contingencies (Note 18)
SHAREHOLDERS' EQUITY
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized as of December 31, 2013 and 2014; 49,030,944 shares issued and outstanding as of December 31, 2013; 49,930,944 shares issued and outstanding as of December 31, 2014)	57	354	349
Additional paid-in capital	57,823	358,768	506,458
Less: Treasury shares (4,145,729 and 5,310,240 shares as of December 31, 2013 and 2014, respectively)	(18,934)	(117,480)	(91,100)
Statutory reserves	1,628	10,103	9,974
Retained earnings	23,587	146,345	126,367
Accumulated other comprehensive loss	(1,781)	(11,050)	(12,830)
Total shareholders' equity	62,380	387,040	539,218
Total liabilities and shareholders' equity	$ 108,540	673,446	740,003

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2014

Related Party Transactions

Schedule of the amounts due from/to a related party

Related Party	Relationship with the Group
Ms. Haiyan Gong(Note)	Nominee shareholder of the VIEs, non-executive co-chairman of the Board of Directors, and the Company’s shareholder.
Mr. JP Gan	Member of the Board of Directors and Compensation Committee, and the chairman of Company’s Nominating and Corporate Governance Committee.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY In Thousands, except Share data, unless otherwise specified	Outstanding ordinary shares CNY	Additional paid-in capital CNY	Treasury shares CNY	Statutory reserves CNY	Retained earnings CNY	Accumulated other comprehensive loss CNY	Total USD ($)	Total CNY
Balance at Dec. 31, 2011	339	522,470		5,792	7,956	(3,040)		533,517
Balance (in shares) at Dec. 31, 2011	47,489,394
Increase (Decrease) in Shareholders' Equity
Net income					58,937			58,937
Issuance of ordinary shares upon exercise of options	6	6,037						6,043
Issuance of ordinary shares upon exercise of options (in shares)	913,801
Issuance (use) of ordinary shares to (under) depository for exercise of options (in shares)	(13,801)
Share-based compensation		13,363						13,363
Appropriation to statutory reserves				3,710	(3,710)			3,710
Repurchase of ordinary shares			(63,702)					(63,702)
Cancellation of treasury shares	(2)	(5,697)	5,699
Cancellation of treasury shares (in shares)	(258,450)
Foreign currency translation adjustments						(772)		(772)
Balance at Dec. 31, 2012	343	536,173	(58,003)	9,502	63,183	(3,812)		547,386
Balance (in shares) at Dec. 31, 2012	48,130,944
Increase (Decrease) in Shareholders' Equity
Net income					63,656			63,656
Issuance of ordinary shares upon exercise of options	6	8,103						8,109
Issuance of ordinary shares upon exercise of options (in shares)	981,992
Dividend distribution to shareholders		(48,246)						(48,246)
Issuance (use) of ordinary shares to (under) depository for exercise of options (in shares)	(81,992)
Share-based compensation		10,428						10,428
Appropriation to statutory reserves				472	(472)			472
Repurchase of ordinary shares			(33,097)					(33,097)
Foreign currency translation adjustments						(9,018)		(9,018)
Balance at Dec. 31, 2013	349	506,458	(91,100)	9,974	126,367	(12,830)		539,218
Balance (in shares) at Dec. 31, 2013	49,030,944							49,030,944
Increase (Decrease) in Shareholders' Equity
Net income					20,107		3,240	20,107
Issuance of ordinary shares upon exercise of options	5	8,699						8,704
Issuance of ordinary shares upon exercise of options (in shares)	647,269
Dividend distribution to shareholders		(165,951)						(165,951)
Issuance (use) of ordinary shares to (under) depository for exercise of options (in shares)	252,731
Share-based compensation		9,562						9,562
Appropriation to statutory reserves				129	(129)			129
Repurchase of ordinary shares			(26,380)					(26,380)
Foreign currency translation adjustments						1,780	287	1,780
Balance at Dec. 31, 2014	354	358,768	(117,480)	10,103	146,345	(11,050)	$ 62,380	387,040
Balance (in shares) at Dec. 31, 2014	49,930,944						49,930,944

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Prepaid Expenses and Other Current Assets (Details) In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY
Prepaid Expenses and Other Current Assets
Prepaid commission to matchmaking service agencies		45,915	6,172
Prepaid expenses-other		7,235	6,659
Advances to employees		4,014	2,761
Interest receivables		2,417	4,782
Rental and other deposits		3,653	2,781
Inventory		1,553
Others		1,714	540
Prepaid expenses and other current assets	$ 10,718	66,501	23,695

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Accounts Receivable, net (Tables)

12 Months Ended

Dec. 31, 2014

Accounts Receivable, net

Summary of Group's accounts receivable

	As of December 31,
	2013	2014
	RMB	RMB
Accounts receivable	33,987	38,875
Less: Allowance for doubtful accounts	—	(1,130	)
Accounts receivable, net	33,987	37,745

Schedule of changes in allowance for doubtful accounts

	2013		2014
	RMB		RMB
Balance as of January 1	110		—
Provision of bad debt	—		2,364
Write-off of bad debt	(110	)	(1,234	)
Balance as of December 31	—		1,130

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Accrued Expenses and Other Liabilities (Details) In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY
Accrued Expenses and Other Liabilities
Accrued salaries and welfare		17,964	19,740
Accrued advertising expenses		2,388	2,371
Accrued network support expenses		1,801	1,908
Business and other tax payable		4,093	3,304
Professional and other service fees		9,262	6,556
Deposits received from matchmaking service agencies		8,980	2,850
Others		6,652	5,616
Balance as at 31 December		51,140	42,345
Less: Current portion	7,332	45,490	39,615
Non-current portion	$ 911	5,650	2,730

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Ordinary Shares and Treasury Shares

12 Months Ended

Dec. 31, 2014

Ordinary Shares and Treasury Shares

Ordinary Shares and Treasury Shares

15.Ordinary Shares and Treasury Shares

As of December 31, 2014, the Company was authorized to issue 100,000,000 ordinary shares, at par value of US$0.001 per share, and 49,030,944 and 49,930,944 ordinary shares were issued as of December 31, 2013 and 2014, respectively.

As of December 31, 2014, 592,097 ordinary shares were issued to a depository and the sole purpose of such depository is to issue ADSs upon the exercise of options granted pursuant to the 2007 Share Incentive Plan (the “Plan”). These ordinary shares were included in issued and outstanding shares on the Group’s balance sheet and statement of changes in shareholders’ equity as of and for the year ended December 31, 2014 although these shares and the related ADSs were not issued to any option holders. The shares issued and held with the depository do not have any shareholder rights and do not have rights to any dividends if and when declared by the Company. Accordingly, these shares held with the depository are accounted for as if they were treasury shares.

In December 2011, the Board of Directors of the Company authorized a share repurchase plan, pursuant to which the Company was authorized to repurchase its own issued and outstanding ADSs up to an aggregate value of US$10,000 from the open market from time to time within one year. In December 2012, the Board of Directors approved another US$10,000 share repurchase plan to authorize the Company to repurchase its own issued and outstanding ADSs from the open market from time to time within one year (“2013 repurchase program”). In November 2013, the Board of Directors approved a twelve-month extension of the 2013 repurchase program. The share repurchase plans do not require the Company to acquire a specific number of shares.

During the year ended December 31, 2012, 2013 and 2014, the Company repurchased 2,004,526 ADSs, 931,593 ADSs and 776,341 ADSs for total consideration of approximately US$10,076, US$5,359 and US$4,287 from the open market, respectively. The ordinary shares representing the repurchased ADS are recorded as treasury shares at purchase cost at the time of repurchase. In 2012, 258,450 ordinary shares were cancelled while in 2013 and 2014, nil ordinary shares were cancelled. The Company recognized the difference between the repurchase costs and the par value in additional paid-in capital. The remaining 5,310,240 ordinary shares which were repurchased but not cancelled were recorded as treasury shares at purchase cost at the time of repurchase as of December 31, 2014.

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Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2014

Prepaid Expenses and Other Current Assets

Schedule of prepaid expenses and other current assets

	As of December 31,
	2013	2014
	RMB	RMB
Prepaid commission to matchmaking service agencies	6,172	45,915
Prepaid expenses-other	6,659	7,235
Advances to employees	2,761	4,014
Interest receivables	4,782	2,417
Rental and other deposits	2,781	3,653
Inventory	—	1,553
Others	540	1,714
	23,695	66,501

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Net Income Per Share

12 Months Ended

Dec. 31, 2014

Net Income Per Share

Net Income Per Share

17.Net Income Per Share

Basic and diluted net income per share for each of the years presented are calculated as follows:

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Numerator:
Net income	58,937	63,656	20,107
Denominator:
Weighted average number of ordinary shares outstanding—basic	46,297,314	44,910,676	44,423,885
Dilutive effect of share options	1,445,784	917,246	966,924
Weighted average number of ordinary shares outstanding—diluted	47,743,098	45,827,922	45,390,809
Basic net income per share	1.27	1.42	0.45
Diluted net income per share	1.23	1.39	0.44

For the years ended December 31, 2012, 2013 and 2014, the potentially dilutive share options and Restricted Shares of 1,012,007, 296,857 and 120,758, respectively, were not included in the calculation of diluted net income per share where their inclusion would be anti-dilutive.

As of December 31, 2013 and 2014, 339,366 and 592,097 ordinary shares were issued to a depository and the sole purpose of such depository is to issue ADS upon the exercise of options granted pursuant to the Plan. These shares were not issued to any option holders. The shares issued and held with the depository do not have any shareholder rights and do not have rights to any dividends if and when declared by the Company. Accordingly, these shares held with the depository are accounted for as if they were treasury shares. The Group did not include these ordinary shares in the calculation of basic and diluted net income per share for the year ended December 31, 2013 and 2014 as these shares are not considered outstanding for net income per share calculation purposes.

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Taxation (Details 3) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2014 Unrecognized tax losses	Dec. 31, 2013 Unrecognized tax losses	Dec. 31, 2012 Unrecognized tax losses	Dec. 31, 2014 Accrued salaries and other expenses	Dec. 31, 2012 Accrued salaries and other expenses	Dec. 31, 2014 Advertising expenses	Dec. 31, 2013 Advertising expenses	Dec. 31, 2012 Advertising expenses	Dec. 31, 2014 Doubtful accounts
Composition of income tax expenses
Current tax expenses		6,434	9,520	8,753
Deferred taxation	(552)	(3,427)	3,533	474
Income tax expenses	485	3,007	13,053	9,227
Reconciliation of the differences between the PRC statutory EIT rate
Statutory EIT rate	25.00%	25.00%	25.00%	25.00%
Effect of non-deductible expenses	7.90%	7.90%	2.60%	4.90%
Effect of lower tax rates in other jurisdictions	0.30%	0.30%	(0.80%)	0.30%
Effect of preferential tax treatments	(19.30%)	(19.30%)	(15.00%)	(19.20%)
Tax incentives for research and development expenses	(7.20%)	(7.20%)	(3.90%)	(3.10%)
Withholding income tax for dividends (as a percent)	8.30%	8.30%	6.00%
Changes in valuation allowance	(2.00%)	(2.00%)	3.10%	5.60%	1.80%	1.70%	1.70%	(1.20%)	0.20%	(3.80%)	1.40%	3.70%	1.20%
Effective income tax rate	13.00%	13.00%	17.00%	13.50%
Percentage of the research and development expenses incurred in an year that may be claimed as an additional tax deduction	50.00%	50.00%	50.00%	50.00%
Effect of the preferential tax treatments
Preferential tax treatments impact to net income to ordinary shareholders		6,125	14,498	15,201
Per share effect, basic		0.14	0.32	0.33
Per share effect, diluted		0.13	0.32	0.32

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CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY
Cash flows from operating activities
Net income	$ 3,240	20,107	63,656	58,937
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,318	14,381	16,175	13,406
Share-based compensation	1,541	9,562	10,428	13,363
Foreign currency exchange loss/(income), net	219	1,361	(1,935)	1,845
Deferred taxation	(552)	(3,427)	3,533	474
Loss from disposal of property, plant and equipment	35	218	5	786
Dividend income from available-for-sale securities	(78)	(482)	(186)	(47)
Changes in operating assets and liabilities:
Accounts receivable, net	(608)	(3,772)	6,115	(23,808)
Prepaid expenses and other assets	(7,202)	(44,687)	20,901	(31,656)
Deferred revenue	10,196	63,260	15,187	32,026
Accounts payable	2,429	15,071	4,458	59
Accrued expenses and other current liabilities	1,417	8,795	18,887	(5,359)
Income tax payable	(514)	(3,189)	9,743	(2,341)
Net cash provided by operating activities	12,441	77,198	166,967	57,685
Cash flows from investing activities
Purchase of short-term deposits	(38,595)	(239,466)	(326,299)	(233,025)
Maturity of short-term deposits	54,202	336,299	233,025	404,500
Purchase of property, plant and equipment	(893)	(5,541)	(18,168)	(83,072)
Purchase of intangible assets			(305)
Consideration paid for a business combination				(4,500)
Proceeds from disposal of property, plant and equipment	2	14		57
Purchase of available-for-sale securities	(1,612)	(10,000)		(5,000)
Investment in equity investee	(1,781)	(11,048)
Net cash provided by/(used in) investing activities	11,323	70,258	(111,747)	78,960
Cash flows from financing activities
Issuance of ordinary shares upon exercise of share options, net of issuance cost	1,403	8,704	8,109	6,043
Payment of dividend to ordinary shareholders	(26,746)	(165,951)	(48,246)
Repurchase of ordinary shares	(4,252)	(26,380)	(33,097)	(63,702)
Net cash used in financing activities	(29,595)	(183,627)	(73,234)	(57,659)
Effect of exchange rate changes on cash and cash equivalents	69	415	(7,082)	(2,617)
Net increase/(decrease) in cash and cash equivalents	(5,762)	(35,756)	(25,096)	76,369
Cash and cash equivalents at beginning of year	37,490	232,613	257,709	181,340
Cash and cash equivalents at end of year	31,728	196,857	232,613	257,709
Supplemental disclosure of cash flow information
Income tax paid	$ (1,551)	(9,623)	(1,115)	(11,094)

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CONSOLIDATED BALANCE SHEETS (Parenthetical)(Consolidated VIEs without recourse to the Company CNY) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Accounts payable	20,692	5,864
Deferred revenue, current portion	189,018	125,391
Accrued expenses and other liabilities, current portion	38,243	34,843
Income tax payable	16,927	20,606
Deferred revenue, non-current portion	2	369
Accrued expenses and other liabilities, non-current portion	5,650	2,730

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Business Combination

12 Months Ended

Dec. 31, 2014

Business Combination

Business Combination

10.Business Combination

In order to further expand its online business, on December 10, 2012, the Group acquired certain assets associated with the website of www.juedui100.com and www.juedui100.com.cn from Beijing Juedui 100 Network Technology Co., Ltd. (the “Juedui 100”) which operates an online platform for providing online dating services. Pursuant to the acquisition agreements, the total purchase consideration was RMB5,500 in cash. In accordance with the relevant accounting guidance, the acquired assets should be considered a business as the assets include both inputs and processes.

The Group accounted for the acquisition as a business combination and the fair value of the assets acquired by the Group was evaluated on the acquisition date. The recognized amounts of the identifiable assets were as follows:

	As of December 10, 2012
	RMB
Identifiable intangible assets:
Brand name	2,141
Customer relationships	1,637
Source code	933
Identifiable assets acquired	4,711
Goodwill	789
Cash consideration	5,500

The excess of purchase price over identifiable assets acquired was recorded as goodwill, and attributed to the Group’s online services segment. Goodwill primarily represents the expected synergies from combining the online platform operations of the Group with the business acquired, which are expected to be complementary to each other. Goodwill is not deductible for tax purposes.

The acquired identifiable intangible assets were valued by various approaches, including the income approach and the cost approach, as appropriate. The Group engaged independent valuation specialists to assist them in determining the fair value of the identifiable intangible assets.

Acquisition-related costs incurred for the acquisition were not material and have been expensed as incurred in general and administrative expenses.

Prior to the acquisition, Juedui100 did not prepare its financial statements in accordance with U.S. GAAP and there was no standalone financial information available for the acquired business. Accordingly, the Group did not present the pro forma financial information with respect to the results of operations of the acquired business considering the financial impact of the acquired business was not material.

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Document and Entity Information	12 Months Ended
	Dec. 31, 2014
Document and Entity Information
Entity Registrant Name	JIAYUAN.COM INTERNATIONAL LTD
Entity Central Index Key	0001511683
Document Type	20-F
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	49,930,944
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

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Intangible assets, net

12 Months Ended

Dec. 31, 2014

Intangible assets, net

Intangible assets, net

11.Intangible assets, net

The following table summarizes the Company’s intangible assets, net:

	As of December 31,
	2013		2014
	RMB		RMB
Brand name	2,141		2,141
Customer relationships	1,637		1,637
Source code	933		933
Domain names	305		305
	5,016		5,016
Less: accumulated amortization	(741	)	(1,406	)
Intangible assets, net	4,275		3,610

For the years ended December 31, 2012, 2013 and 2014, amortization expenses for the above intangible assets amounted to RMB142, RMB599 and RMB665, respectively.

As of December 31, 2014, amortization expenses for future periods are estimated as follows:

For the year ended December 31,	Amortization expenses
	RMB
2015	665
2016	665
2017	612
2018	338
2019	338
Thereafter	992
Total	3,610

During the years ended December 31, 2012, 2013 and 2014, no impairment of intangible assets was recognized by the Group.

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Segment Information (Details) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY segment	Dec. 31, 2014 Online services CNY	Dec. 31, 2013 Online services CNY	Dec. 31, 2012 Online services CNY	Dec. 31, 2014 Personalized matchmaking services CNY	Dec. 31, 2013 Personalized matchmaking services CNY	Dec. 31, 2012 Personalized matchmaking services CNY	Dec. 31, 2014 Events and other services CNY	Dec. 31, 2013 Events and other services CNY	Dec. 31, 2012 Events and other services CNY
Segment Information
Number of reportable segments				3
Segment Information
Net revenues	$ 98,957	613,990	492,606	410,803	425,544	422,088	362,492	164,598	52,458	33,143	23,848	18,060	15,168
Cost of revenues	(44,772)	(277,789)	(180,521)	(143,685)	(148,811)	(140,975)	(117,830)	(117,054)	(29,792)	(15,903)	(11,924)	(9,754)	(9,952)
Gross profit	$ 54,185	336,201	312,085	267,118	276,733	281,113	244,662	47,544	22,666	17,240	11,924	8,306	5,216

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net revenues	$ 98,957	613,990	492,606	410,803
Cost of revenues	(44,772)	(277,789)	(180,521)	(143,685)
Gross profit	54,185	336,201	312,085	267,118
Operating expenses:
Selling and marketing expenses	(40,734)	(252,736)	(183,619)	(143,376)
General and administrative expenses	(9,359)	(58,071)	(52,565)	(54,367)
Research and development expenses	(3,731)	(23,149)	(21,918)	(17,587)
Total operating expenses	(53,824)	(333,956)	(258,102)	(215,330)
Operating income	361	2,245	53,983	51,788
Interest income	2,846	17,658	11,687	13,323
Foreign currency exchange (loss)/income , net	(219)	(1,361)	1,935	(1,845)
Other income, net	737	4,572	9,104	4,898
Income before income tax	3,725	23,114	76,709	68,164
Income tax expenses	(485)	(3,007)	(13,053)	(9,227)
Net income	3,240	20,107	63,656	58,937
Net income	3,240	20,107	63,656	58,937
Other comprehensive (loss)/income:
Foreign currency translation adjustments, net of tax of RMB nil	287	1,780	(9,018)	(772)
Comprehensive income	$ 3,527	21,887	54,638	58,165
Net income per share:
Basic (in CNY and dollars per share)	$ 0.07	0.45	1.42	1.27
Diluted (in CNY and dollars per share)	$ 0.07	0.44	1.39	1.23
Weighted average shares used in calculating net income per share, basic (in shares)	44,423,885	44,423,885	44,910,676	46,297,314
Weighted average shares used in calculating net income per share, diluted (in shares)	45,390,809	45,390,809	45,827,922	47,743,098
Net income per ADS:
Basic (in CNY and dollars per share)	$ 0.11	0.68	2.13	1.91
Diluted (in CNY and dollars per share)	$ 0.11	0.66	2.08	1.85
Weighted average shares used in calculating net income per ADS, basic (in shares)	29,615,923	29,615,923	29,940,450	30,864,876
Weighted average shares used in calculating net income per ADS, diluted (in shares)	30,260,539	30,260,539	30,551,948	31,828,732

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Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Measurements

Fair Value Measurements

5.Fair Value Measurements

The Group’s financial instruments include cash equivalents, short-term deposits, available-for-sale securities, accounts receivables, prepaid expenses and other current assets, other non-current assets, accounts payable, accrued expenses and other current liabilities, and accrued expenses and other liabilities, non-current portion. The carrying value of the Company’s short-term financial instruments approximates their fair value because of their short maturities. The carrying value of other non-current assets and accrued expenses and other liabilities, non-current portion approximates their fair value because the change in fair value after considering discount rate is considered immaterial.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (also referred to as an exit price). It establishes a hierarchy for inputs used in measuring fair value that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Valuation techniques used to measure fair value shall maximize the use of observable inputs. The hierarchy is as follows:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Group engaged independent valuation specialists to assist them in determining the fair value of equity issued (including share options) and the goodwill and intangible assets arising from the Group’s business combination.

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Following is a description of the valuation techniques that the Group uses to measure the fair value of assets and liabilities that the Group measured and reported on its consolidated balance sheet at fair value on a recurring basis.

The following table sets forth the financial instruments, measured at fair value, by level within the fair value hierarchy:

		Fair value measurements at reporting date using
		Quoted prices in
	Total fair value	active market	Significant other	Significant
	and carrying value	for identical	observable	unobservable
	on balance sheet	assets (Level 1)	inputs (Level 2)	inputs (Level 3)
	RMB	RMB	RMB	RMB
As of December 31, 2013
Cash equivalents	232,458	—	232,458	—
Short-term deposits	336,299	—	336,299	—
Available-for-sale securities	5,233	—	5,233	—
As of December 31, 2014
Cash equivalents	196,810	—	196,810	—
Short-term deposits	239,466	—	239,466	—
Available-for-sale securities	15,715	—	15,715	—

Cash equivalents and short-term deposits: The Group’s cash equivalents and short term deposits mainly consist of time deposits placed with banks. The Group measures cash equivalents and short term deposits at fair value based on the pervasive interest rates in the market, which are also the interest rates as stated in the contracts with the banks. The Group classifies the valuation techniques that use the pervasive interest rates input as Level 2 of fair value measurements. Generally there are no quoted prices in active markets for identical time deposits at the reporting date. In order to determine the fair value, the Group must use the discounted cash flow method and observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Available-for-sale securities: The Group measures available-for-sale securities at fair value. To estimate the fair value of investments in financial instruments with a variable interest rate indexed to the performance of underlying assets, the Group refers to the quoted rate of return provided by the investment company at the end of each period. The Group classifies the valuation techniques as Level 2 of fair value measurement.

The following are other financial instruments not measured at fair value in the balance sheets but for which the fair value is estimated for disclosure purposes.

Short-term receivables and payables: Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value due to their short term nature. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value due to their short term nature. The Group estimates fair values of short-term receivables and payables and classifies the valuation technique as Level 3 of fair value measurement, as it uses estimated cash flow input which is unobservable in the market.

Non-current assets and non-current liabilities : Non-current assets of receivables for rental deposits is a financial asset with carrying value that approximate fair value due to the change in fair value, after considering the discount rate, being immaterial. Accrued expenses and other liabilities, non-current portion is a financial liability with carrying value that approximate fair value due to the change in fair value, after considering the discount rate, being immaterial. The Group estimated fair values of non-current assets and non-current liabilities using the discounted cash flow method. The Group classifies the valuation technique as Level 3 of fair value measurement, as it uses estimated cash flow input which is unobservable in the market.

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Concentration, Credit and Other Risks

12 Months Ended

Dec. 31, 2014

Concentration, Credit and Other Risks

Concentration, Credit and Other Risks

4.Concentration, Credit and Other Risks

a)PRC Regulations

The PRC market in which the Group operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Group to conduct online services through contractual arrangements in the PRC since the industry remains highly regulated. The Group conducts all of its operations in China through its VIEs and VIE’s subsidiary, which the Group consolidates as a result of a series of contractual arrangements enacted among Beijing Miyuan, the VIEs and  their legal shareholders. The Group believes that the contractual arrangements among Beijing Miyuan, the VIEs and their legal shareholders are in compliance with PRC law and are legally enforceable. If the VIEs or their legal shareholders fail to perform their obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, the Group will have to enforce its rights under these contracts through the operations of PRC law and courts. However, uncertainties in the PRC legal system could limit the Group’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If the Group had direct ownership of the VIEs, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Group relies on the VIEs and their legal shareholders’ performance of their contractual obligations to exercise effective control. In addition, the exclusive technology licenses and service agreements with the VIEs and VIE’s subsidiary, which first expire on the tenth anniversary of the agreement signing date, is subject to subsidiaries’ unilateral termination right. In general, neither the VIEs nor their legal shareholders may terminate the contracts prior to the expiration date.

Although the PRC has, since 1978, implemented a wide range of market-oriented economic reforms, continued reforms and progress towards a full market-oriented economy are uncertain. In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like the Company, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. Consequently, such uncertainties may limit the Group’s ability to enforce its contractual arrangements with the VIEs. Although the Group believes the contractual arrangements are in compliance with current PRC regulations, there can be no assurance that the PRC government would agree that these contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws, rules and regulations governing the validity of these contractual arrangements are uncertain and the relevant government authorities have broad discretion in interpreting these laws, rules and regulations. Such uncertainties on the compliance with PRC laws of the contractual arrangements may adversely affect the Group’s ability to consolidate the VIEs. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Group’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Group’s ability to conduct business in the PRC.

On January 19, 2015, the Ministry of Commerce of the PRC, or (the “MOFCOM”) released on its website for public comment a proposed PRC law (the “Draft FIE Law”) that appears to include VIEs within the scope of entities that could be considered to be foreign invested enterprises (or “FIEs”) that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control.” If the Draft FIE Law is passed by the People’s Congress of the PRC and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed to reach the Group’s VIE arrangements, and as a result the Group’s VIEs could become explicitly subject to the current restrictions on foreign investment in certain categories of industry. The Draft FIE Law includes provisions that would exempt from the definition of foreign invested enterprises entities where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law does not make clear how “control” would be determined for such purpose, and is silent as to what type of enforcement action might be taken against existing VIEs that operate in restricted industries and are not controlled by entities organized under PRC law or individuals who are PRC citizens. If a finding were made by PRC authorities, under existing law and regulations or under the Draft FIE Law if it becomes effective, that the Group’s operation of certain of its operations and businesses through VIEs, regulatory authorities with jurisdiction over the licensing and operation of such operations and businesses would have broad discretion in dealing with such a violation, including levying fines, confiscating the Group’s income, revoking the business or operating licenses of the affected businesses, requiring the Group to restructure its ownership structure or operations, or requiring the Group to discontinue all or any portion of its operations. Any of these actions could cause significant disruption to the Group’s business operations, and have a severe adverse impact on the Group’s cash flows, financial position and operating performance.

The following combined financial information of the Group’s VIEs and VIE’s subsidiary, as applicable, were included in the accompanying consolidated financial statements of the Group:

	As of December 31,
	2013	2014
	RMB	RMB
Total assets	501,281	633,177
Total liabilities	312,572	409,772
Payable to third parties	189,803	270,533
Payable to Group entities	122,769	139,239

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Net revenue	411,084	492,799	614,239
Net income	23,038	61,608	25,133
Inter-company service fees paid/payable	43,446	9,278	11,615

	For the year ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Net cash provided by operating activities	54,966		151,318		90,925
Net cash used in investing activities	(67,544	)	(87,916	)	(97,104	)
Effect of exchange rate changes on cash and cash equivalents	(11	)	(180	)	134
Net (decrease)/increase in cash and cash equivalents	(12,589	)	63,222		(6,045	)

The total assets of the consolidated VIEs and VIE’s subsidiary were mainly comprised of cash and cash equivalents, short-term deposits, accounts receivable, prepayments and other current assets, property and equipment, investment in equity investee, intangible assets and goodwill. The total liabilities of the consolidated VIEs and VIE’s subsidiary were mainly comprised of deferred revenue and accrued expenses and other current liabilities.

The revenue-producing assets of VIEs mainly include property and equipment, intangible assets and goodwill. There were also unrecognized revenue-producing assets including intellectual property such as patents and licenses, and self-developed software which were expensed as incurred as the amounts were not significant. The carrying values of property and equipment, intangible assets and goodwill of VIEs as of December 31, 2013 and 2014 were as follows:

	As of December 31,
	2013	2014
	RMB	RMB
Property and equipment, net	99,296	91,208
Intangible assets, net	4,275	3,610
Goodwill	789	789

All of the Group’s revenues for the periods presented were contributed by the VIEs and VIE’s subsidiary.

b)Concentration of credit risks

Financial instruments that potentially subject the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, short-term deposits, available-for-sale securities and accounts receivable. As of December 31, 2013 and 2014, the Group’s cash and cash equivalents and short-term deposits were held by financial institutions located in the PRC and Hong Kong that management believes are of high-credit ratings and quality. Available-for-sale securities were placed with a financial institution and have original maturities of one month. Accordingly, management determined that the Group’s available-for-sale securities are exposed to minimal credit risks. Accounts receivable are typically unsecured and are mainly derived from revenues collected by WVAS partners on behalf of the Group in the PRC and amounts due from sponsors who sponsored the Group’s offline events. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Group performs on the WVAS partners and offline events sponsors and its ongoing monitoring of outstanding balances.

c)Foreign currency risk

A majority of the Group’s operating transactions are denominated in RMB and a significant portion of the Group’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Group in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance.

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Share-based Compensation

12 Months Ended

Dec. 31, 2014

Share-based Compensation

Share-based Compensation

16.Share-based Compensation

a)Share Incentive Plan

On May 14, 2007, the Board of Directors of the BVI Company approved the plan, which provides for the issuance of options to purchase up to 2,960,606 ordinary shares, to any qualified persons, as determined by the Board of Directors of the BVI Company. On December 8, 2010, the Board of Directors of the Company passed a resolution to increase the total number of ordinary shares reserved under the Plan to 5,233,920 ordinary shares.

On June 15, 2012, the shareholders passed a resolution to increase the maximum aggregate number of ordinary shares that may be delivered pursuant to awards granted to eligible persons under the Plan by 2,400,000 ordinary shares, from 5,233,920 ordinary shares to 7,633,920 ordinary shares, and amended the Plan to allow the administrator of the Plan to have additional flexibility to modify awards granted under this Plan, including the re-pricing of “underwater” share options, without shareholder approval.

As stipulated in the share option agreements, the awards granted shall vest in accordance with one of the following conditions: (1) over a four-year service period, with 25% of the options to vest on the first anniversary of the date of grant, and the remaining 75% of the options to vest on a pro-rata basis of the calendar quarter-end of each of the 12 quarters after the first anniversary of the date of grant; or (2) over a four-year service period, with 25% of the options to vest on the date of IPO, and the remaining 75% of the options to vest on a pro-rata basis on the calendar quarter-end of each of the 12 quarters following the date of IPO; or (3) 100% upon the date of IPO.

On July 12, 2012, the Board of Directors of the Company approved to amend certain option awards granted by the Company to a director and certain employees of the Company during the period from December 2010 to July 2011. A total of 546,000 share options granted at the original exercise prices of $5.00 to $7.44 per share were cancelled and replaced by a total of 255,453 share options with an exercise price of $3.227 per share, the then fair value of the ordinary share on the modification date.

On June 5, 2013, the Board of Directors of the Company approved to amend 120,850 share options granted by the Company to certain directors, employees of the Company and a non-employee on June 6, 2007 to extend the option life for one year to June 5, 2014.

On October 10, 2014, the Board of Directors of the Company approved to amend all of the share options that have not been exercised. After the modification, the new exercise price was reduced by US$0.67 per ADS compared with original exercise price.

The aforementioned modifications were accounted for pursuant to ASC 718 under US GAAP. The incremental fair value before and after the modification was recognized as follows: (a) for vested options, the incremental share-based compensation expenses are recognized immediately; (b) For non-vested options, the incremental share-based compensation expenses are recognized in the statement of comprehensive income over the remaining vesting period. The incremental fair values were determined to be immaterial.

The Company’s share option activities for the years ended December 31, 2012, 2013 and 2014 are summarized below:

	Share options outstanding
	Share options		Weighted average exercise price	Weighted average remaining contractual life (in years)	Weighted average grant date fair value
			US$		US$
Balances outstanding at January 1, 2012	4,382,636		2.78	4.23	1.57
Granted	2,410,000		3.35		1.26
Exercised	(913,801	)	1.05		0.90
Modified	(290,547	)	3.23		1.06
Forfeited	(1,169,906	)	4.35		1.95
Expired	(50,000	)	0.30		0.02
Balances outstanding at December 31, 2012	4,368,382		2.69	4.34	1.30
Granted	90,000		4.61		1.15
Exercised	(981,992	)	1.33		1.32
Forfeited	(291,915	)	3.87		1.37
Expired	(50,000	)	0.30		0.05
Balances outstanding at December 31, 2013	3,134,475		3.10	3.98	1.31
Granted	457,500		3.71		1.22
Exercised	(642,058	)	2.00		1.09
Forfeited	(173,462	)	3.41		1.28
Balances outstanding at December 31, 2014	2,776,455		3.02	3.65	1.30
Exercisable at December 31, 2012	1,353,698		1.40	2.39	1.24
Exercisable at December 31, 2013	1,357,529		2.75	3.40	1.31
Exercisable at December 31, 2014	1,373,002		2.82	3.15	1.36

As of December 31, 2014, the intrinsic value of outstanding and exercisable share options was US$918 and US$618, respectively, which is calculated as the difference between the Company’s closing stock price as of December 31, 2014 and the exercise price of the share options. For the year ended December 31, 2014, 722,919 shares of options were vested.

For the year ended December 31, 2012, 2013 and 2014, the total intrinsic value of options exercised was US$2,172, US$2,665 and US$1,709, respectively.

The fair value of each option at the grant date and modification date were estimated using the Binominal Option Pricing Model by the Company with assistance from independent valuation specialists.

The following table summarizes the assumptions used to estimate the fair values of the share options granted in the years presented:

	For the year ended December 31,
	2012	2013	2014
Risk-free interest rate	1.30%-2.25%	2.05%	2.70%
Exercise multiple	2.80	2.80	2.80
Expected forfeiture rate	5%	5%	5%
Contractual life of option	6 years	6 years	6 years
Expected volatility	38.00%-38.88%	39.00%	45.00%
Dividend yield	—	5%	4%

The risk-free interest rate was based on the market yield of US$ denominated China International Government Bonds with maturity terms equal to the contractual life of option. The exercise multiple is calculated as the ratio of fair value of stock over the exercise price as at the time the share option is exercised and estimated based on an empirical research study regarding the early exercise behavior of employees with share options. Expected forfeiture rate was estimated based on annual staff turnover for periods after June 2007. Pursuant to the Plan, the contractual life of the share options is 6 years. The expected volatility was estimated based on both historical volatility of comparable companies and historical volatility of the Company since January 1, 2012. For the options granted before 2013, no dividends were assumed in the estimation considering the Company has no history or expectation of paying dividends on its ordinary shares. For the options granted in 2013 and 2014,  5% and 4% dividends were assumed in the estimation respectively considering the Company’s plan to distribute annual dividends in 2013 and thereafter.

The total fair value of equity awards vested during the year ended December 31, 2012, 2013 and 2014 were RMB4,246, RMB9,275 and RMB5,912, respectively.

For the years ended December 31, 2012, 2013 and 2014, the Group recorded share-based compensation of RMB10,891, RMB8,276 and RMB5,522, respectively, using graded-vesting method, for the options granted with service conditions.

As of December 31, 2014, total amount of unrecognized compensation costs relating to non-vested share options granted by the Company amounted to RMB3,717. These unrecognized compensation costs are expected to be recognized over a weighted average period of 0.89 years.

b)Founder’s Shares

On December 16, 2009, pursuant to an agreement entered into by Ms. Haiyan Gong, the founder and Mr. Qingyuan Fang, the then chief operating officer (“COO”) of the Company (“Founder’s Share Agreement”), the COO was granted 398,000 options for the BVI Company’s ordinary shares (the “Founder’s Shares”) held by Aprilsky Ltd., a company ultimately owned by Ms. Haiyan Gong. The awards have an exercise price of US$1.256 and shall vest over a four year period, with 50% of the options to vest on the second anniversary and 50% of the options to vest on the fourth anniversary of the Founder’s Share Agreement signing date, subject to the employee’s continued service with the Company.

The Company recognized these awards as employee share-based compensation awards in accordance with the applicable guidance, and measured the fair value of the awards on the grant date. Compensation expense was recognized over the requisite service period using the graded vesting method.

Share-based compensation expenses related to the Founder’s Shares of RMB92, RMBnil and RMBnil were recognized in general and administrative expenses in the consolidated statements of comprehensive income for the year ended December 31, 2012, 2013 and 2014, respectively.

In July 2012, upon the termination of employment of the COO, the unexercised options were forfeited and the recognized compensation cost was reversed.

c)Restricted Shares

For the years ended December 31, 2012, 2013 and 2014, the Company granted 281,540, 34,286 and 486,000 restricted shares (the “Restricted Shares”), respectively, to certain key employees of the Company. These Restricted Shares shall vest over a four-year service period, with 25% of the Restricted Shares subject to vest on the first anniversary of the date of grant and the remaining 75% subject to vest in twelve quarterly installments.

The Company’s Restricted Shares’ activities for the year ended December 31, 2013 and 2014 are summarized below:

	Restricted Shares outstanding
	Restricted Shares		Weighted average remaining contractual life (in years)
Balances outstanding at December 31, 2012	281,540		5.34
Granted	34,286
Forfeited	(2,885	)
Balances outstanding at December 31, 2013	312,941		4.49
Granted	486,000
Exercised	(5,211	)
Forfeited	(13,623	)
Balances outstanding at December 31, 2014	780,107		4.73

The total fair value of Restricted Shares vested during the year ended December 31, 2012, 2013 and 2014 were RMBnil, RMB2,580 and RMB1,850, respectively.

For the year ended December 31, 2012, 2013 and 2014, the Group recorded share-based compensation of RMB2,380, RMB2,152 and RMB4,040, respectively, related to the Restricted Shares using the graded-vesting method.

As of December 31, 2014, unrecognized compensation expenses relating to the non-vested Restricted Shares amounted to RMB7,406. These expenses are expected to be recognized over a weighted average period of 1.03 years. For the year ended December 31, 2014, 80,198 restricted shares were vested.

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Goodwill

12 Months Ended

Dec. 31, 2014

Goodwill

Goodwill

12.Goodwill

Goodwill is attributable to the Group’s online services segment under which significant synergies are expected to arise after the Group’s acquisition.

The Company performed a goodwill impairment test as of year end date and concluded that no impairment should be recognized as of December 31, 2013 and 2014. No reasonable change to the assumptions would lead to an impairment charge.

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Restricted Net Assets (Details 4) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2014 Parent company USD ($)	Dec. 31, 2014 Parent company CNY	Dec. 31, 2013 Parent company CNY	Dec. 31, 2012 Parent company CNY
Condensed Cash Flow Statements, Captions [Line Items]
Cash flows provided by operating activities	$ 12,441	77,198	166,967	57,685	$ 79	491	519	26,046
Cash flows provided by/(used in) investing activities	11,323	70,258	(111,747)	78,960	27,053	167,853	(23,823)	146,504
Cash flows used in financing activities	(29,595)	(183,627)	(73,234)	(57,659)	(29,595)	(183,627)	(73,234)	(57,660)
Effect of exchange rate changes on cash and cash equivalents	69	415	(7,082)	(2,617)	42	260	(6,844)	(2,604)
Net increase/(decrease) in cash and cash equivalents	(5,762)	(35,756)	(25,096)	76,369	(2,421)	(15,023)	(103,382)	112,286
Cash and cash equivalents at beginning of year	37,490	232,613	257,709	181,340	11,824	73,365	176,747	64,461
Cash and cash equivalents at end of year	$ 31,728	196,857	232,613	257,709	$ 9,403	58,342	73,365	176,747

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Investment in equity investee

12 Months Ended

Dec. 31, 2014

Investment in equity investee

Investment in equity investee

8.Investment in equity investee

In October 2014, Beijing HQS completed an acquisition of shares in Wuhan Didi Network Technology Co., Ltd. (“Wuhan Didi”), a developer of mobile applications in the PRC, for cash consideration of approximately RMB11.0 million. Beijing HQS holds 20% of economic interests and can exercise significant influence after the completion of this acquisition. The investment is accounted for under the cost method given that such shares contain certain terms such as liquidation preferences over ordinary shares. As a result, the shares are not considered in-substance common stock and are accounted for under the cost method. The fair value of this investment approximated to its carrying value as of December 31, 2014.

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Investment in equity investee (Details) (Beijing HQS, Wuhan Didi, CNY) In Millions, unless otherwise specified	Oct. 31, 2014
Beijing HQS | Wuhan Didi
Investment in equity investee
Cash consideration paid upon the closing of the transaction	11.0
Percentage of economic interests held	20.00%

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Accounts Receivable, net

12 Months Ended

Dec. 31, 2014

Accounts Receivable, net

Accounts Receivable, net

6.Accounts Receivable, net

The following summarized the Group’s accounts receivable, net as of December 31, 2013 and 2014:

	As of December 31,
	2013	2014
	RMB	RMB
Accounts receivable	33,987	38,875
Less: Allowance for doubtful accounts	—	(1,130	)
Accounts receivable, net	33,987	37,745

The following summarized the changes in allowance for doubtful accounts:

	2013		2014
	RMB		RMB
Balance as of January 1	110		—
Provision of bad debt	—		2,364
Write-off of bad debt	(110	)	(1,234	)
Balance as of December 31	—		1,130

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Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2014

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

7.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	As of December 31,
	2013	2014
	RMB	RMB
Prepaid commission to matchmaking service agencies	6,172	45,915
Prepaid expenses-other	6,659	7,235
Advances to employees	2,761	4,014
Interest receivables	4,782	2,417
Rental and other deposits	2,781	3,653
Inventory	—	1,553
Others	540	1,714
	23,695	66,501

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Property and Equipment, net

12 Months Ended

Dec. 31, 2014

Property and Equipment, net

Property and Equipment, net

9.Property and Equipment, net

Property and equipment, net, consisted of the following:

	As of December 31,
	2013		2014
	RMB		RMB
Office buildings	77,797		77,797
Office buildings improvements	3,884		3,948
Computer and software	54,271		56,942
Furniture, fixture and other equipment	4,544		4,960
Motor vehicles	407		407
Leasehold improvements	3,296		4,254
	144,199		148,308
Less: accumulated depreciation and amortization	(44,715	)	(56,614	)
Property and equipment, net	99,484		91,694

For the years ended December 31, 2012, 2013 and 2014, depreciation and amortization expenses for the property and equipment amount to RMB13,264, RMB15,576 and RMB13,716, respectively.

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Goodwill (Details) (CNY) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Goodwill
Goodwill impairment recognized	0	0

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Subsequent Events (Details) (Restricted Shares)	1 Months Ended	12 Months Ended		0 Months Ended
	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2013	Feb. 26, 2015
Subsequent events
Granted (in shares)	281,540	486,000	34,286
First anniversary of the date of grant
Subsequent events
Percentage of awards subject to vest		25.00%
Pro-rata vesting on calendar quarter-end of each 12 quarters after first anniversary of grant
Subsequent events
Percentage of awards subject to vest		75.00%
Period of vesting of the remaining 75% awards granted		12
Subsequent events. | Director and certain employees
Subsequent events
Granted (in shares)				427,500
Number of director granted with restricted shares				1
Service period				4 years
Subsequent events. | Director and certain employees | First anniversary of the date of grant
Subsequent events
Percentage of awards subject to vest				25.00%
Subsequent events. | Director and certain employees | Pro-rata vesting on calendar quarter-end of each 12 quarters after first anniversary of grant
Subsequent events
Percentage of awards subject to vest				75.00%
Period of vesting of the remaining 75% awards granted				12

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Taxation (Details) (CNY) In Thousands, unless otherwise specified	12 Months Ended			13 Months Ended	23 Months Ended	16 Months Ended	28 Months Ended	7 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jan. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014
Business Tax, Value Added Tax and Surcharges
Business tax and surcharges	16,345	17,090	14,242
Shanghai Miyuan
Transition from PRC Business Tax to PRC Value Added Tax
Value Added Tax rate (as a percent)				3.00%	6.00%
Beijing Miyuan
Transition from PRC Business Tax to PRC Value Added Tax
Value Added Tax rate (as a percent)	6.00%					3.00%
Beijing Aizhenxin
Transition from PRC Business Tax to PRC Value Added Tax
Value Added Tax rate (as a percent)							3.00%
Shanghai HQS
Transition from PRC Business Tax to PRC Value Added Tax
Value Added Tax rate (as a percent)								6.00%
Minimum
Business Tax, Value Added Tax and Surcharges
Business tax and surcharges rate (as a percent)	0.00%
Maximum
Business Tax, Value Added Tax and Surcharges
Business tax and surcharges rate (as a percent)	8.60%

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Intangible assets, net (Details) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 CNY	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2014 USD ($)	Dec. 31, 2014 Brand name CNY	Dec. 31, 2013 Brand name CNY	Dec. 31, 2014 Customer relationships CNY	Dec. 31, 2013 Customer relationships CNY	Dec. 31, 2014 Source code CNY	Dec. 31, 2013 Source code CNY	Dec. 31, 2014 Domain names CNY	Dec. 31, 2013 Domain names CNY
Intangible assets, net
Gross Carrying Amount	5,016	5,016			2,141	2,141	1,637	1,637	933	933	305	305
Less: accumulated amortization	(1,406)	(741)
Intangible assets, net	3,610	4,275		582
Amortization expenses	665	599	142
Amortization expenses for future periods
2015	665
2016	665
2017	612
2018	338
2019	338
Thereafter	992
Intangible assets, net	3,610	4,275		582
Impairment of intangible assets	0	0	0

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Measurements

Schedule of fair value of assets measured on recurring basis

		Fair value measurements at reporting date using
		Quoted prices in
	Total fair value	active market	Significant other	Significant
	and carrying value	for identical	observable	unobservable
	on balance sheet	assets (Level 1)	inputs (Level 2)	inputs (Level 3)
	RMB	RMB	RMB	RMB
As of December 31, 2013
Cash equivalents	232,458	—	232,458	—
Short-term deposits	336,299	—	336,299	—
Available-for-sale securities	5,233	—	5,233	—
As of December 31, 2014
Cash equivalents	196,810	—	196,810	—
Short-term deposits	239,466	—	239,466	—
Available-for-sale securities	15,715	—	15,715	—

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Summary of Significant Accounting Policies (Details 2) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 item	Dec. 31, 2013	Dec. 31, 2012
Impairment of long-lived assets and intangible assets
Impairment of long-lived assets recognized for the periods presented	0	0	0
Impairment of intangible assets recognized for the periods presented	0	0	0
Impairment of investment in equity investee	0	0	0
Revenue recognition and deferred revenue
Number of types of online services	2
Number of primary fee models for online services	2
Duration of pay-per-use online services	1 day
Commission fees paid to wireless value added services partners	65,997	61,881	49,923
Events and VIP services revenue
Percentage of contract payment refunded to user if termination of VIP Services contract is within initial seven days (as a percent)	80.00%
Initial period from commencement of VIP Services contract within which users can terminate the contract and receive 80% of payment as refund	7 days
Customer loyalty program
Revenue recognized from loyalty points	0	4,917	0
Deferred revenue from customer loyalty program		0
Trademarks and domain names
Goodwill and intangible assets
Estimated useful lives	10 years
Customer relationships
Goodwill and intangible assets
Estimated useful lives	5 years
Source code
Goodwill and intangible assets
Estimated useful lives	10 years

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Taxation

12 Months Ended

Dec. 31, 2014

Taxation

Taxation

14.Taxation

a)Business Tax, Value Added Tax and Surcharges

The Group’s PRC operations are subject to PRC business tax (“Business Tax”) and surcharges at rates ranging from 0% to 8.60%, depending on the nature of the service revenue and the geographical region. Business Tax and surcharges is calculated by multiplying the applicable tax rate by gross revenue, and is recognized when the revenue is recognized. The Group recognized RMB14,242, RMB17,090 and RMB16,345 of business tax and surcharges, as a reduction of revenues, for the years ended December 31, 2012, 2013 and 2014, respectively.

Effective from January 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation launched a Business Tax to Value Added Tax (“VAT”) Transformation Pilot Program (the “Pilot Program”) for certain industries. VAT payable on goods sold or taxable labor services provided by a general VAT taxpayer for a taxable period is the net balance of the output VAT for the period after crediting the input VAT for the period. Hence, the amount of VAT payable does not result directly from output VAT generated from goods sold or taxable labor services provided.

With the adoption of the Pilot Program, Shanghai Miyuan, Beijing Miyuan, Beijing Aizhenxin and majority businesses of Shanghai HQS ceased to be subject to Business Tax. Shanghai Miyuan was subject to VAT at a rate of 3% from January 2012 to January 2013 and at a rate of 6% starting from February 2013. Beijing Miyuan was subject to VAT at a rate of 3% from September 2012 to December 2013 and at a rate of 6% starting from January 2014. Beijing Aizhenxin is subject to VAT at a rate of 3% starting from September 2012. Shanghai HQS’s online services, personalized matchmaking services and advertising services were subject to VAT at a rate of 6% starting from June 2014. Jiayuan Shanghai Center, Shanghai HQS’s events business, Shanghai HQS’s Beijing branch, Beijing HQS and Xique continued to be subject to Business Tax.

b)Income tax

The Cayman Islands and the British Virgin Islands

Under the common tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

Under the current laws of the British Virgin Islands, BVI Company is a tax-exempted company.

Hong Kong

Jiayuan Hong Kong is not subject to Hong Kong profits tax on foreign-sourced income, dividends and capital gains. As an entity incorporated in Hong Kong, Jiayuan Hong Kong was subject to 16.5% income tax for the years ended December 31, 2012, 2013 and 2014 on its taxable profits generated from operations in Hong Kong. Payment of dividends is not subject to withholding tax in Hong Kong.

The PRC

The Company’s subsidiaries and VIEs in China are governed by the Enterprise Income Tax Law (“EIT Law”), which became effective on January 1, 2008. Pursuant to the EIT Law and its implementation rules, enterprises in China are generally subjected to tax at a statutory rate of 25%. Certified High and New Technology Enterprises (“HNTE”) are entitled to a favorable statutory tax rate of 15%. Qualified software enterprises can enjoy an income tax exemption for two years beginning with their first profitable year and a 50% tax reduction to the applicable tax rate for the subsequent three years. Qualified key software enterprises are entitled to a favorable statutory tax rate of 10%.

The Group’s PRC entities accrued for corporate income tax as follows:

· Shanghai Miyuan was subject to 25% EIT in 2010. In 2011, Shanghai Miyuan was qualified as a software enterprise under which it is entitled to income tax exemption for the fiscal years 2011 and 2012 and a preferential tax rate of 12.5% from fiscal years 2013 through 2015. However, as Shanghai Miyuan was not continually qualified as a software enterprise in 2014, it was subject to 25% EIT in 2014 and thereafter.

· Shanghai HQS was subject to 15% EIT as a result of HNTE status from 2010 to 2012. In February 2014, Shanghai HQS was qualified as a key software enterprise and was subject to 10% EIT for 2013 and 2014. In April 2014, Shanghai HQS completed the process for the renewal of HNTE status and was continually entitled to a preferential income tax rate of 15% for 2013 to 2015. As Shanghai HQS is eligible for both preferential rates of 10% and 15% in 2013 and 2014, the Company elects to enjoy the rate of 10% for 2013 and 2014.

· In 2014, Beijing Miyuan was qualified as a software enterprise under which it is entitled to income tax exemption for two years beginning from its first year with taxable income and a 50% tax reduction to a 12.5% income tax rate for the subsequent three years. Beijing Miyuan incurred taxable loss in 2014.

· Beijing HQS, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center were subject to 25% EIT from 2012 to 2014.

In addition, under the EIT Law, effective from January 1, 2008, dividends, interests, rent, royalties and gains on transfers of property payable by a foreign-invested enterprise in the PRC to its foreign investor who is a non-resident enterprise are subject to withholding tax of 10%, unless such non-resident enterprise’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a reduced rate of withholding tax. The withholding tax rate is 5% for the parent company incorporated in certain qualified jurisdictions if the parent company is the beneficial owner of the dividend and approved by the PRC tax authority to enjoy the preferential tax benefit. This withholding tax regulation imposed on the dividend income received from the Group’s PRC subsidiaries reduces the Group’s net income. On February 22, 2008, the Ministry of Finance and State Tax Bureau jointly issued a circular which stated that for foreign invested enterprises, all profits accumulated up to December 31, 2007 are exempted from withholding tax when they are distributed to foreign investors.

The EIT Law also provides that an enterprise established under the laws of foreign countries or regions but whose “de facto management body” is located in the PRC would be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementation Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on an assessment of surrounding facts and circumstances, the Group does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should the Company and its overseas subsidiaries be treated as a resident enterprise for PRC tax purposes, they will be subject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to January 1, 2008.

The Company’s subsidiaries had not declared any dividend to their respective parent companies and had determined that it had no plan to declare or pay any dividends to the parent companies out of the accumulated undistributed earnings as of December 31, 2012. Accordingly, no deferred income tax was accrued and required to be accrued as of December 31, 2012.

On May 16, 2013, the Board of Directors of the Company declared a special cash dividend of US$0.26 per ADS, payable to record holders of the Company’s ordinary shares at the close of business on June 5, 2013. The special dividend of US$7,800 was paid out of reserves to the shareholders on June 18, 2013. On September 29, 2014, the Board of Directors of the Company further declared a special cash dividend of US$0.67 per ADS, payable to record holders of the Company’s ordinary shares at the close of business on October 15, 2014. The special dividend of US$19,767 was paid out of reserves to the shareholders on October 27, 2014 and October 29, 2014.  As the Company assessed that it does not meet the criteria for being a tax resident enterprise in the PRC in accordance with Chinese EIT law and regulations, no withholding tax was withheld on behalf of the Company’s shareholders.

In addition, pursuant to the annual dividend policy which was approved by the Company’s board of directors on May 6, 2013, the Company expects to pay annual dividends with an aggregate amount of up to 60% of the Group’s annual net income before share-based compensation expenses.  Accordingly, the Group assessed that only a portion of the net income of the PRC entities for the year ended December 31, 2013 and thereafter will be reinvested indefinitely. As a result, deferred tax liabilities of RMB6,517 were recorded as of December 31, 2014 for the accumulated earnings expected to be distributed as cash dividends from the Group’s PRC entities to the Group’s overseas entities.

The undistributed earnings held by the Group’s PRC entities as of December 31, 2013 and 2014 were RMB219,876 and RMB262,568, respectively. An estimated PRC withholding taxes of RMB21,988 and RMB26,257 would be due if all the earnings were remitted as dividends as of December 31, 2013 and 2014, respectively.

Composition of income tax expenses

The current and deferred portions of income tax expenses included in the Group’s consolidated statements of comprehensive income are as follows:

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Current tax expenses	8,753	9,520	6,434
Deferred taxation	474	3,533	(3,427	)
Income tax expenses	9,227	13,053	3,007

Reconciliation of the differences between the PRC statutory EIT rate of 25% and the Group’s effective tax rate is as follows:

	For the year ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Statutory EIT rate	25.0	%	25.0	%	25.0	%
Effect of non-deductible expenses	4.9	%	2.6	%	7.9	%
Effect of lower tax rates in other jurisdictions	0.3	%	(0.8	)%	0.3	%
Effect of preferential tax treatments	(19.2	)%	(15.0	)%	(19.3	)%
Tax incentives for research and development expenses (i)	(3.1	)%	(3.9	)%	(7.2	)%
Withholding income tax for dividends	—		6.0	%	8.3	%
Changes in valuation allowance:	5.6	%	3.1	%	(2.0	)%
- Unrecognized tax losses	1.7	%	1.7	%	1.8	%
- Accrued salaries and other expenses	0.2	%	—		(1.2	)%
- Advertising expenses	3.7	%	1.4	%	(3.8	)%
- Doubtful accounts	—		—		1.2	%
Effective income tax rate	13.5	%	17.0	%	13.0	%

(i) The Group obtained a tax incentive relating to research and development expense of one of its VIEs in the PRC. Under such tax incentive rule, the Group may claim an additional tax deduction amounting to 50% of the research and development expenses incurred in a year.

The effect of the preferential tax treatments available to the Group is as follows.

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Preferential tax treatments impact to net income to ordinary shareholders	15,201	14,498	6,125
Per share effect, basic	0.33	0.32	0.14
Per share effect, diluted	0.32	0.32	0.13

Deferred tax assets and liabilities

Deferred taxes are measured using the enacted tax rates for the periods in which they are expected to be reversed. Significant components of the Group’s deferred tax assets and liabilities are as follows:

	As of December 31,
	2013		2014
	RMB		RMB
Deferred tax assets, current
Net operating loss carry forwards	4,365		6,565
Accrued salaries and other expenses	3,391		3,329
Advertising expenses	15,214		18,799
Government subsidies	333		169
Other	188		616
Total deferred tax assets, current	23,491		29,478
Deferred tax assets, non-current	—		—
Total deferred tax assets	23,491		29,478
Less: valuation allowance
Net operating loss carry forwards	(4,365	)	(4,667	)
Accrued salaries and other expenses	(284	)	—
Advertising expenses	(15,214	)	(15,448	)
Other	—		(381	)
Total valuation allowance	(19,863	)	(20,496	)
Net deferred tax assets	3,628		8,982
Deferred tax liabilities, non-current
Withholding income tax for dividends	4,590		6,517

The Group had net operating loss carry forwards from certain subsidiaries, VIEs and VIE’s subsidiary amounting to RMB34,217 as of December 31, 2014, of which RMB1,983 will expire on December 31, 2015, RMB6,392 will expire on December 31, 2016, RMB3,522 will expire on December 31, 2017, RMB5,043 will expire on December 31, 2018 and RMB16,204 will expire on December 31, 2019.

The Group evaluates a variety of factors in determining the amount of the valuation allowance, including the Group’s operating history, accumulated deficit, existence of taxable temporary differences and reversal periods.

In addition, pursuant to the EIT Law, the deductible advertising expenses should be no more than 15% of the revenues as determined under PRC GAAP and the excess amount could be carried forward to the following years. As the Group expects certain excess amount of advertising expenses incurred by shanghai HQS in previous years could be further deductible in 2015, the Group recognized the deferred tax assets for such amount. Other than that, the Group expects the deferred tax asset in relation to the additional excess amount of advertising expenses is not realizable in the foreseeable future, accordingly, full valuation allowance is provided. The following table shows the movements of valuation allowance for the years presented:

	Years Ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Balance at beginning of the year	(13,652	)	(17,315	)	(19,863	)
Change in valuation allowance	(3,663	)	(2,548	)	(633	)
Balance at end of the year	(17,315	)	(19,863	)	(20,496	)

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Related Party Transactions

12 Months Ended

Dec. 31, 2014

Related Party Transactions

Related Party Transactions

19.Related Party Transactions

The table below sets forth the related parties and their relationships with the Group:

Related Party	Relationship with the Group
Ms. Haiyan Gong(Note)	Nominee shareholder of the VIEs, non-executive co-chairman of the Board of Directors, and the Company’s shareholder.
Mr. JP Gan	Member of the Board of Directors and Compensation Committee, and the chairman of Company’s Nominating and Corporate Governance Committee.

Note: In March 2015, Ms. Haiyan Gong resigned from her position as a director of the Company and will no longer hold the position of co-chairman of the Board.

During the years presented in the financial statements, there were no significant related party transactions except for the following:

On December 24, 2012, the Group entered into a consultancy agreement with Ms. Haiyan Gong, under which Ms. Haiyan Gong agreed to provide, among other things, certain consultant services for a term of three years effective from January 1, 2013 and would receive a monthly fee of RMB49. The Group recorded general and administrative expense of RMB633 and RMB643 in connection with this agreement for the years ended December 31, 2013 and 2014, respectively.

On October 29, 2013, the Group entered into a personalized matchmaking services agreement with Mr. JP Gan, under which the Group agreed to provide personalized matchmaking services for RMB120 for a term of 20 months. The Group recognized revenues of RMB12 and RMB72 for the years ended December 31, 2013 and 2014, respectively.

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Variable Interest Entities (Details) In Thousands, unless otherwise specified		0 Months Ended						0 Months Ended
	Dec. 31, 2014 Consolidated variable interest entities and VIE's subsidiary CNY	Mar. 01, 2014 Exclusive technology license and service agreements Shanghai HQS	Mar. 01, 2014 Loan agreements with shareholders of VIE Shanghai HQS USD ($)	Mar. 01, 2014 Loan agreements with shareholders of VIE Shanghai HQS CNY	Mar. 01, 2014 Loan agreements with shareholders of VIE Beijing HQS CNY	Mar. 01, 2014 Loan agreements with shareholders of VIE Xique CNY	Aug. 13, 2012 Loan agreements with shareholders of VIE Beijing Aizhenxin CNY	Mar. 01, 2014 Voting rights entrustment agreements Shanghai HQS	Mar. 01, 2014 Cooperative operation agreements Shanghai HQS and Jiayuan Shanghai Center
Variable Interest Entities
Automatic extension period for the agreement except by mutual agreement and upon early termination		10 years						10 years	10 years
Interest free loan granted to shareholders of VIE			$ 1,200	9,000	1,000	1,000	20,000
Registered capital	32,500

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Taxation (Tables)

12 Months Ended

Dec. 31, 2014

Taxation

Schedule of current and deferred portions of income tax expenses

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Current tax expenses	8,753	9,520	6,434
Deferred taxation	474	3,533	(3,427	)
Income tax expenses	9,227	13,053	3,007

Schedule of reconciliation of the differences between the PRC statutory EIT rate

	For the year ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Statutory EIT rate	25.0	%	25.0	%	25.0	%
Effect of non-deductible expenses	4.9	%	2.6	%	7.9	%
Effect of lower tax rates in other jurisdictions	0.3	%	(0.8	)%	0.3	%
Effect of preferential tax treatments	(19.2	)%	(15.0	)%	(19.3	)%
Tax incentives for research and development expenses (i)	(3.1	)%	(3.9	)%	(7.2	)%
Withholding income tax for dividends	—		6.0	%	8.3	%
Changes in valuation allowance:	5.6	%	3.1	%	(2.0	)%
- Unrecognized tax losses	1.7	%	1.7	%	1.8	%
- Accrued salaries and other expenses	0.2	%	—		(1.2	)%
- Advertising expenses	3.7	%	1.4	%	(3.8	)%
- Doubtful accounts	—		—		1.2	%
Effective income tax rate	13.5	%	17.0	%	13.0	%

(i) The Group obtained a tax incentive relating to research and development expense of one of its VIEs in the PRC. Under such tax incentive rule, the Group may claim an additional tax deduction amounting to 50% of the research and development expenses incurred in a year.

Schedule of the effect of preferential tax treatments on earnings

	For the year ended December 31,
	2012	2013	2014
	RMB	RMB	RMB
Preferential tax treatments impact to net income to ordinary shareholders	15,201	14,498	6,125
Per share effect, basic	0.33	0.32	0.14
Per share effect, diluted	0.32	0.32	0.13

Schedule of significant components of entity's deferred tax assets

	As of December 31,
	2013		2014
	RMB		RMB
Deferred tax assets, current
Net operating loss carry forwards	4,365		6,565
Accrued salaries and other expenses	3,391		3,329
Advertising expenses	15,214		18,799
Government subsidies	333		169
Other	188		616
Total deferred tax assets, current	23,491		29,478
Deferred tax assets, non-current	—		—
Total deferred tax assets	23,491		29,478
Less: valuation allowance
Net operating loss carry forwards	(4,365	)	(4,667	)
Accrued salaries and other expenses	(284	)	—
Advertising expenses	(15,214	)	(15,448	)
Other	—		(381	)
Total valuation allowance	(19,863	)	(20,496	)
Net deferred tax assets	3,628		8,982
Deferred tax liabilities, non-current
Withholding income tax for dividends	4,590		6,517

Schedule of the movements of valuation allowance

	Years Ended December 31,
	2012		2013		2014
	RMB		RMB		RMB
Balance at beginning of the year	(13,652	)	(17,315	)	(19,863	)
Change in valuation allowance	(3,663	)	(2,548	)	(633	)
Balance at end of the year	(17,315	)	(19,863	)	(20,496	)

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Tax effect of foreign currency translation adjustments	0	0	0

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

3.Summary of Significant Accounting Policies

a)Basis of presentation and consolidation

The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries and its VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and its VIEs have been eliminated upon consolidation. The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Group in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers, or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.

A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, has controlling financial interest of the entity. The Company or its subsidiary is considered to be the primary beneficiary if the Company or its subsidiary has the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

In determining whether the Company or its subsidiaries are the primary beneficiary of the VIEs, the Company considered whether it has the power to direct activities that are significant to Shanghai HQS, Beijing HQS, Xique, Beijing Aizhenxin and Jiayuan Shanghai Center’s economic performance, including the power to appoint senior management, right to direct company strategy, power to approve capital expenditure budgets, and power to establish and manage ordinary business operation procedures and internal regulations and systems.

There are no entities where the Company has a variable interest but is not the primary beneficiary.

b)Use of estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of the assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results may differ from those estimates.

Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include the useful lives of property and equipment and intangible assets, impairment assessments for property and equipment, intangible assets,   goodwill, investment in equity investee, allowance for doubtful accounts, valuation allowance of deferred tax assets, relative values of revenue elements of service packages, estimation of payments collected by wireless value-added services (“WVAS”) partners and determination of share-based compensation expenses. In addition, the Group uses assumptions in the valuation model to estimate the fair value of share options granted and modified. The Group bases its estimates of the carrying value of certain assets and liabilities on the historical experience and on other various factors that it believes to be reasonable under the circumstances, when the carrying values are not readily available from other sources.

c)Convenience translation

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from Renminbi (“RMB”) into United States dollars (“US$”) as of and for the year ended December 31, 2014 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.2046, representing the rate as certified by the H.10 weekly statistical release of Federal Reserve Board on December 31, 2014. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2014, or at any other rate.

d)Cash and cash equivalents

Cash and cash equivalents represent cash on hand, demand deposits and highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash.

e)Term deposits

Term deposits represent time deposits placed with banks. Deposits with original maturities of one year or less are reported as current assets while deposits with original maturities of more than one year are reported as non-current assets. Interest earned is recorded as interest income in the consolidated statements of comprehensive income during the periods presented.

f)Available-for-sale securities

Investments in financial instruments with variable interest rates indexed to the performance of underlying assets are classified as available-for-sale securities. Available-for-sale securities are measured at fair value at the date of initial recognition and subsequently carried at fair value. To estimate fair value, the Group refers to the quoted rate of return provided by banks at the end of each reporting period. Changes in fair value are reflected in the consolidated statement of comprehensive income. Dividend and realized gains and losses upon sale of the available-for-sale securities are recognized as other income.

g)Accounts receivable and allowance for doubtful accounts

Accounts receivable mainly represents the amounts due from WVAS partners with whom the Group has entered into agreements for users to purchase the services of the Group and amounts due from offline events sponsors. An allowance for doubtful debts is provided based on an ageing analysis of accounts receivable balances, historical bad debt rates, repayment patterns and credit analysis. The Group also makes a specific allowance if there is evidence showing that the receivable is likely to be irrecoverable, and assesses the probability of recovery on an annual basis. Accounts receivable in the consolidated balance sheet were stated net of such provisions. The allowance for doubtful accounts was RMB110, RMBnil and RMB1,130 for the year ended December 31, 2012, 2013 and 2014, respectively.

h)Property and equipment

Property and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is provided on a straight-line basis over the following estimated useful lives:

	Estimated useful lives
Office building	30 years
Office building improvements	10 years
Computer and software	3 years
Furniture, fixture and other equipment	3 years
Motor vehicles	4 years
Leasehold improvements	Shorter of lease term or estimated useful lives of assets

Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of the property and equipment, are expensed as incurred. Gains and losses from the disposal of property and equipment are included in income from operations.

i)Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Group’s business combinations.

In accordance with FASB guidance for goodwill and other intangible assets, goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Group completes a two-step goodwill impairment test at each year end date. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value reporting unit over the amount assigned to the assets and liabilities. This allocation process is only performed for the purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value over the implied fair value of goodwill.

The Group did not incur any impairment loss on goodwill during any of the periods presented.

j)Intangible assets

Intangible assets consist of acquired intangible assets with finite lives as a result of the Group’s business combination and the acquired domain names, and are carried at cost less accumulated amortization. Amortization is computed using the straight-line method over the following estimated useful lives of the intangible assets:

	Estimated useful lives
Trademarks and domain names	10 years
Customer relationships	5 years
Source code	10 years

k)Impairment of long-lived assets and intangible assets

The carrying amount of long-lived assets and intangible assets are reviewed for impairment whenever events or changes in the circumstances indicate that the carrying value of an asset may not be recoverable. The Group assesses the recoverability of the long-lived assets and intangible assets by comparing the carrying amount of assets to the estimated future undiscounted cash flows expected to be generated by the assets. Such assets are considered to be impaired if the sum of the expected undiscounted cash flow is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets or intangible assets was recognized for any of the periods presented.

l)Investment in equity investee

Equity investment represents the Group’s investment in a private-owned company. For any equity investment that is not considered as debt security or equity security and that neither has readily determinable fair values nor is considered in-substance common stock, the cost method is used.

Under the cost method, the Group carries the investment at cost and recognizes income to the extent of dividends received from the distribution of the equity investee’s post-acquisition profits.

The Group continually reviews its investment in equity investee to determine whether a decline in fair value below the carrying value is other than temporary. The primary factors the Group considers in its determination are the length of time that the fair value of the investment is below the Group’s carrying value; the financial condition, operating performance and the prospects of the equity investee; and other company specific information such as recent financing rounds. If the decline in fair value is deemed to be other than temporary, the carrying value of the equity investee is written down to fair value. No impairment of investment in equity investee was recognized for the year ended December 31, 2014.

m)Revenue recognition and deferred revenue

Revenue is recognized when persuasive evidence of an arrangement exists, service has been rendered, the price is fixed or determinable and collection is reasonably assured. Revenue is deferred until these criteria are met as described below.

Revenues presented in the consolidated statement of comprehensive income include revenues from online services, personalized matchmaking services, and events and other services.

Online services revenue

The Group offers two types of online services through its online platforms, including message exchanging services and value-added services. Users prepay for virtual currencies that can be used as consideration for the Group’s online services. The Group charges for message exchanging services when one registered user initiates contact with another registered user via the Group’s online platform, and either the sender or recipient may pay for the service. Subsequently, the Group does not charge for any message exchanges between the same two users. Based on the Group’s historical data, the exchange between two users on its online platform typically lasted only a few days. The Group believes that users place the most value on the initial connection, and that users are interested in further interactions after exchanging personal contact information to communicate with each other directly. The Group also offers value-added online services, including sending virtual gifts, improved search rankings and online chatting.

The Group has adopted two primary fee models for the online services: a pay-per-use model and a periodic subscription model. Online services offered under the pay-per-use model include improved search rankings for the duration of one day, message sending or receiving and sending virtual gifts. As the Group provides these services within a short period of time, revenue is recognized when the virtual currencies are used and services are rendered. If the communication patterns of the users change, the timing of the Group’s revenue recognition for these services may be impacted and revenue may be deferred and recognized over a longer period. The Group’s virtual currencies purchased by users that have yet to be used are initially recorded as deferred revenue.

Under the periodic subscription model, users pay a fixed subscription fee for certain services which are delivered over a predetermined subscription period. Online services offered under the subscription model include sending multiple messages a day, reading unlimited number of messages, improved search rankings for a period longer than a day, unlimited online chatting and premium user subscriptions. Fees for subscription services are collected upfront and initially recognized as deferred revenue, and revenue is recognized proportionately over the applicable subscription periods as services are rendered.

The Group’s virtual currencies can be purchased through the Group’s online platform, where the payment is collected through online payment platforms, or through the Group’s WVAS partners. The Group’s WVAS partners offer a payment method by charging services to the customer’s telephone bills, collecting payment from the users and remitting the cash to the Group after payment is collected. Due to the time lag between when the services are rendered and billing statements are provided by the WVAS partners, revenues from the Group’s virtual currencies sold through such channel is estimated based on the Group’s internal billing records and billing confirmations with the WVAS partners. The Group adjusts its revenue recognition for prior periods’ confirmation rates and prior periods’ discrepancies between internally estimated revenues and actual revenues confirmed by the WVAS partners. There were no significant difference between the Group’s estimates and the WVAS partners’ billing statements for all the periods presented.

Revenue from virtual currencies sold through the WVAS partners are recognized on a gross basis as the Group is considered the primary obligor in the arrangements. The Group is also responsible for designing, developing and implementing the online services, and bears credit risks associated with uncollectible fees. In addition, the Group determines the price and the WVAS partners earn only a fixed percentage of commission fees. The amounts attributed to the WVAS partners are determined pursuant to the arrangements between the Group and the WVAS partners, and are recognized as costs of revenues. Such cost of revenues amounted to RMB49,923, RMB61,881 and RMB65,997 for the years ended December 31, 2012, 2013 and 2014, respectively.

The Group also offers web-based games and mobile games under an item-based revenue model, where the basic game play functions are free of charge and players are charged for purchases of in-game virtual items or game points. Revenues of games business are included in online service revenue.

For web-based games, the Group cooperates with third-party game developers by entering into cooperation agreements with them. The web-based games designed, developed and hosted by these developers are made available to the players through the Group’s platforms. The Group views that the developers are primarily responsible for the operation of web-based games to the players. The Group generally collects payments from players in connection with the sale of in-game virtual items and remits certain agreed-upon percentages of the proceeds to the game developers and records revenue net of such remittances. Revenue is recognized when the in-game virtual items are consumed.

For mobile games, the Group is primarily responsible for the operation and sells game points to players through third party mobile application stores. The mobile application stores remit the proceeds to the Group after deducting certain agreed-upon percentages of commission fees. Revenue from the sale of game points is recorded gross of the commission fees paid to mobile application stores and is recognized when the game points are consumed.

Personalized matchmaking services revenue

The Group provides personalized matchmaking services to individual users, which generally consist of unlimited access to certain online services, tickets to a number of events, personalized communications, provision of detailed background checks, dating and relationship consultation and advice and search services provided by the Group’s customer service representatives in a specified contractual period. The Group provides various personalized matchmaking services throughout the contract period on an as-needed basis. When the Group enters into a personalized matchmaking service contract with an individual user, the Group is unable to determine or estimate the volume of each separate service to be provided to the particular user. Different types of services under such personalized bundled contracts are to be provided gradually over the contract period, and as such, the Group accounts for the personalized matchmaking services as a single unit of accounting on a contract basis. Starting from 2013, the Group entered into business arrangements with matchmaking service agencies for providing personalized matchmaking services in the PRC. The Group grants matchmaking service agencies limited rights to use the Group’s brand, trademark and certain resources under the direction of the Group in accordance with the agency agreements. The Group collects upfront payments from the users and remits the commission fees to the matchmaking service agencies at the pre-determined rates pursuant to the agreements between the Group and the matchmaking service agencies. The Group is responsible for the determination of the service scope and price, and the signing of the service agreements and the collection of service fees from customers directly. Revenue from users obtained through matchmaking service agencies are recognized on a gross basis as the Group is considered the primary obligor in the service arrangements.

Payments for personalized matchmaking services are collected upfront and initially recorded as deferred revenue, and revenue is recognized ratably over the contract service period. In addition, there are training fees charged upfront to the matchmaking service agencies, which are recognized as revenue when the training services are rendered.

Contracts for personalized matchmaking services may be terminated at any time at the user’s sole discretion during the contractual period. It is the Group’s policy to refund 80% of the contract payment to the user only if termination takes place within the initial seven days. The Group recognizes all deferred revenue remaining, after deducting the cash refund, if any, from the contract at the time of termination.

Events and other services revenue

The Group earns revenue from organizing and hosting events, including speed-dating, dance parties, and other social events for its users. Speed dating is an organized form of matchmaking that focuses on meeting multiple potential romantic partners over the course of a single event. Tickets are generally sold at the events, and revenue is recognized upon the conclusion of the events when services have been rendered. For certain events where tickets are prepaid by the users, prepaid fees are initially recorded as deferred revenue and revenue is recognized upon the completion of the events. Events services revenue also include the revenue from event sponsorship arrangements whereby third-party companies enter into agreements with the Group to sponsor a particular offline event and the revenue from event sponsorship arrangements are recognized upon the completion of the sponsored event.

Other services revenue mainly represents revenues from online advertising. Revenue from online advertising is principally derived from advertising arrangements that allow advertisers to place advertisements on particular areas of the Group’s websites, in particular formats and over a particular period of time. The Group enters into advertising contracts which are signed to establish the fixed price for the advertising arrangements to be provided, and payment is collected upfront and initially recognized as deferred revenue. Revenues from advertising-related arrangements are recognized on a straight-line basis over the contractual period.

n)Customer loyalty program

Registered users earned loyalty points based on their activities on the Group’s platform and/or purchase of online services, which could be used to redeem online services once a minimum number of points had been accumulated. The Group considered loyalty points awarded for the purchase of online services to be part of its revenue generating activities, and such arrangements were considered to have multiple elements. Under the applicable guidance, total consideration was allocated to the purchased services and loyalty points based on the relative selling price of the purchased services and redeemable services. In determining the best estimated selling price of each loyalty point, the Group considered the selling price of the underlying services if they were not redeemed using loyalty points and the average number of loyalty points needed to redeem each type of service. Consideration allocated to the loyalty points was initially recorded as deferred revenue, and revenue was recognized when the points were redeemed and services were rendered. In 2013, the Group suspended the customer loyalty program. All the loyalty points expired in 2013 and the Group recognized the deferred revenue accordingly.

For the years ended December 31, 2012, 2013 and 2014, revenue recognized from loyalty points amounted to RMBnil, RMB4,917 and RMBnil, respectively. All the loyalty points expired in 2013 and the deferred revenue balance in relation to the customer loyalty program amounted to RMBnil as of December 31, 2013 and thereafter.

o)Cost of revenues

Cost of revenues primarily consists of commission fees paid to the WVAS partners for money collection, salaries and wages, network costs, depreciation of property and equipment, rental expenses of premises and facilities and commission fees paid to personalized matchmaking service agencies.

p)Share-based compensation

The Company grants share options and restricted shares to eligible employees and directors under a share incentive plan. The awards are measured at the grant date fair value and are recognized as an expense using the graded vesting method, net of estimated forfeiture rate. The Company recognizes awards with service condition terms only over the requisite service period, which is generally the vesting period.

q)Income taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current year. Deferred tax liabilities and assets for the future tax consequences of events are also recognized in the Group’s financial statements or tax returns.

Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized.

The PRC tax regulations impose a 10% withholding income tax for dividends distributed by foreign invested enterprises to their immediate holding companies outside the PRC. A lower withholding tax rate will be applied if there is a tax treaty arrangement between mainland China and the jurisdiction of the foreign holding company. A holding company in Hong Kong, for example, will be subject to a 5% withholding tax rate under the Arrangement Between the PRC and Hong Kong on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital if such holding company is considered a non-PRC resident enterprise and holds at least 25% of the equity interests in the PRC foreign invested enterprise distributing the dividends, subject to approval of the PRC local tax authority. However, if the Hong Kong holding company is not considered to be the beneficial owner of such dividends under applicable PRC tax regulations, such dividend will remain subject to a withholding tax rate of 10%.

The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement of comprehensive income. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2012, 2013 and 2014. As of December 31, 2014, the Group did not have any significant unrecognized uncertain tax positions.

r)Employee benefit expenses

All eligible employees of the Group are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group has no further payment obligations once the contributions have been paid.

The Group recorded employee benefit expenses of RMB14,005, RMB17,568 and RMB20,553 for the years ended December 31, 2012 and 2013 and 2014, respectively.

s)Statutory reserves

The Group’s subsidiaries, VIEs and VIE’s subsidiary established in the PRC are required to make appropriations to certain non-distributable reserve funds.

In accordance with the laws applicable to China’s Foreign Investment Enterprises, the Group’s subsidiaries registered as wholly-owned foreign enterprise has to make appropriations from its after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by the Ministry of Finance of the People’s Republic of China (“PRC GAAP”)) to reserve funds including general reserve fund, and staff bonus and welfare fund.

The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the company. Appropriation to the staff bonus and welfare fund is at the company’s discretion.

In addition, in accordance with the China Company Laws, the VIEs of the Company registered as a PRC domestic company must make appropriations from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund and a discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits as determined under PRC GAAP. Appropriation is not required if the surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company.

The use of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increases the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to staff and for the collective welfare of employees. All these reserves are not allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation.

For the years ended December 31, 2012, 2013 and 2014, RMB3,710, RMB472 and RMB129 were appropriated to the statutory reserves, respectively.

t)Research and development costs

Research and development costs include expenses incurred by the Company to develop, maintain and manage the Company’s platforms. These expenses are mainly comprised of salaries, employee benefits and other headcount-related costs associated with the research and development department. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair and maintenance of the existing platforms. Costs incurred in the development phase are capitalized and amortized over the estimated product life.

During the periods presented, the amount of costs qualifying for capitalization was not significant and as a result, the Group expensed all research and development costs as incurred.

u)Advertising expenses

Advertising expenses, which generally reflect the cost of promotions to create or stimulate a positive image of the Group or a desire to obtain the Group’s services, are expensed as incurred. Advertising costs included in selling and marketing expense were RMB69,966, RMB71,498 and RMB105,636 for the years ended December 31, 2012, 2013 and 2014, respectively.

v)Operating lease

Leases where substantially all the risks and rewards of ownership of the assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of comprehensive income on a straight line basis over the lease periods.

w)Government subsidies

Government subsidies represent discretionary cash subsidies granted by the local government to encourage the development of certain enterprises that are established in the local economic region. The cash subsidies are recognized as other income when there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

x)Foreign currency translation

The Group uses the RMB as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in the British Virgin Islands and Hong Kong is the US$, while the functional currency of the Group’s other subsidiaries, VIEs and VIE’s subsidiary incorporated and operated in the PRC is the RMB.

In the consolidated financial statements, the financial information of the Company and its subsidiaries which use US$ as their functional currency, has been translated into RMB. Assets and liabilities are translated from each subsidiary’s functional currency at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated using the average rate for the year. Gains and losses resulting from foreign currency translation to reporting currency are recorded in accumulated other comprehensive income in the consolidated statements of comprehensive income for the years presented.

y)Net income per share and per American Depository Share (“ADS”)

Basic net income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the year. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of non-vested restricted shares and shares issuable upon the exercise of stock options (using the treasury stock method). Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such shares would be anti-dilutive.

Basic and diluted net income per ADS is computed based on net income and the corresponding basic and diluted number of ADSs, assuming that, during each period presented, every two ADSs represent three ordinary shares of the Company.

z)Comprehensive income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding those resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, consists of the accumulated foreign currency translation adjustments.

aa)Recent accounting pronouncements

On May 28, 2014, the FASB and IASB issued their converged standard on the recognition of revenue from contracts with customers. The standard is intended to improve the financial reporting of revenue and improve comparability of the top line in financial statements globally. The FASB is amending the FASB Accounting Standards Codification and creating a new Topic 606, Revenue from Contracts with Customers, to supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the amendments supersede some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. For a public entity, the amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is currently evaluating the impact on its consolidated financial statements of adopting this guidance.

In June 2014, under ASC 718, Compensation—Stock Compensation, the FASB issued Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. These amendments apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. That is the case when an employee is eligible to retire or otherwise terminate employment before the end of the period in which a performance target could be achieved and still be eligible to vest in the award if and when the performance target is achieved. For all entities, the amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group is currently evaluating the impact on its consolidated financial statements of adopting this guidance.

In August 2014, the FASB issued Presentation of Financial Statements — Going Concern. This standard requires management to evaluate for each annual and interim reporting period whether it is probable that the reporting entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued. If the entity is in such a position, the standard provides for certain disclosures depending on whether or not the entity will be able to successfully mitigate its going concern status. This guidance is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. The Group does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.

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Accounts Receivable, net (Details 2) (CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Accounts Receivable, net
Balance as of beginning period		110
Provision of bad debt	2,364
Write-off bad debt	(1,234)	(110)
Balance as of ending period	1,130

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Restricted Net Assets (Details 2) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CNY	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY	Dec. 31, 2012 CNY	Dec. 31, 2011 CNY	Dec. 31, 2014 Parent company USD ($)	Dec. 31, 2014 Parent company CNY	Dec. 31, 2013 Parent company USD ($)	Dec. 31, 2013 Parent company CNY	Dec. 31, 2012 Parent company CNY	Dec. 31, 2011 Parent company CNY
Current assets:
Cash and cash equivalents	$ 31,728	196,857	$ 37,490	232,613	257,709	181,340	$ 9,403	58,342	$ 11,824	73,365	176,747	64,461
Short-term deposits	38,595	239,466		336,299			1,526	9,466		177,319
Prepaid expenses and other current assets	10,718	66,501		23,695			1,282	7,955		8,000
Total current assets	91,105	565,266		635,455			12,211	75,763		258,684
Non-current assets:
Investments in subsidiaries and VIEs							50,971	316,253		286,455
Total assets	108,540	673,446		740,003			63,182	392,016		545,139
Current liabilities:
Accrued expenses and other liabilities, current portion	7,332	45,490		39,615			802	4,976		5,921
Total current liabilities	44,199	274,237		193,096			802	4,976		5,921
Total liabilities	46,160	286,406		200,785			802	4,976		5,921
SHAREHOLDERS' EQUITY
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized as of December 31, 2013 and 2014; 49,030,944 shares issued and outstanding as of December 31, 2013; 49,930,944 shares issued and outstanding as of December 31, 2014)	57	354		349			57	354		349
Additional paid-in capital	57,823	358,768		506,458			57,823	358,768		506,458
Less: Treasury shares (4,145,729 and 5,310,240 shares as of December 31, 2013 and 2014, respectively)	(18,934)	(117,480)		(91,100)			(18,934)	(117,480)		(91,100)
Statutory reserves	1,628	10,103		9,974			1,628	10,103		9,974
Retained earnings	23,587	146,345		126,367			23,587	146,345		126,367
Accumulated other comprehensive loss	(1,781)	(11,050)		(12,830)			(1,781)	(11,050)		(12,830)
Total shareholders' equity	62,380	387,040		539,218	547,386	533,517	62,380	387,040		539,218
Total liabilities and shareholders' equity	$ 108,540	673,446		740,003			$ 63,182	392,016		545,139
Ordinary shares, par value (in dollars per share)	$ 0.001		$ 0.001				$ 0.001		$ 0.001
Ordinary shares, shares authorized	100,000,000	100,000,000	100,000,000	100,000,000			100,000,000	100,000,000	100,000,000	100,000,000
Ordinary shares, shares issued	49,930,944	49,930,944	49,030,944	49,030,944			49,930,944	49,930,944	49,030,944	49,030,944
Ordinary shares, shares outstanding	49,930,944	49,930,944	49,030,944	49,030,944			49,930,944	49,930,944	49,030,944	49,030,944
Treasury shares, shares	5,310,240	5,310,240	4,145,729	4,145,729			5,310,240	5,310,240	4,145,729	4,145,729

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Taxation (Details 4) (CNY) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets, current
Net operating loss carry forwards	6,565	4,365
Accrued salaries and other expenses	3,329	3,391
Advertising expenses	18,799	15,214
Government subsidies	169	333
Other	616	188
Total: deferred tax assets, current	29,478	23,491
Total: deferred tax assets	29,478	23,491
Less: valuation allowance
Total: valuation allowance	(20,496)	(19,863)	(17,315)	(13,652)
Net deferred tax assets	8,982	3,628
Deferred tax liabilities, non-current
Withholding income tax for dividends	6,517	4,590
Net operating loss carry forwards
Less: valuation allowance
Total: valuation allowance	(4,667)	(4,365)
Accrued salaries and other expenses
Less: valuation allowance
Total: valuation allowance		(284)
Advertising expenses
Less: valuation allowance
Total: valuation allowance	(15,448)	(15,214)
Other
Less: valuation allowance
Total: valuation allowance	(381)

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Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information

Segment Information

20.Segment Information

In accordance with relevant US GAAP guidance, the reportable segments represent the Group’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker (“CODM”) to assess performance and to allocate resources. In identifying its reportable segments, the Group also considers the nature of services provided by its operating segments. The Group’s CODM has been identified as the Board of Directors (“BOD”), who reviews the consolidated and segment results when making decisions about allocation of resources and assessing performance of the Group.

Prior to 2013, the Group had operated in three reportable segments which were online services, events and personalized matchmaking services, and other services. In 2013, the Group restructured its personalized matchmaking business and entered into the cooperation arrangements with matchmaking service agencies in different cities in the PRC. In order to manage the business more effectively, the Group’s CODM are presented with financial information on this business on a stand-alone basis. In addition, financial information for events services was combined with other services when presented. Accordingly, the reportable segments are online services, personalized matchmaking services, and events and other services in 2013 and 2014. Information for net revenues, cost of revenues and gross profit by segment was recast to conform to the current presentation for all periods presented.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment’s revenues, cost of revenues, and gross profit. The CODM does not review operating expenses or balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM.

For the year ended December 31, 2012

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	362,492		33,143		15,168		410,803
Cost of revenues	(117,830	)	(15,903	)	(9,952	)	(143,685	)
Gross profit	244,662		17,240		5,216		267,118

For the year ended December 31, 2013

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	422,088		52,458		18,060		492,606
Cost of revenues	(140,975	)	(29,792	)	(9,754	)	(180,521	)
Gross profit	281,113		22,666		8,306		312,085

For the year ended December 31, 2014

	Online services		Personalized matchmaking services		Events and other services		Consolidated
	RMB		RMB		RMB		RMB
Net revenues	425,544		164,598		23,848		613,990
Cost of revenues	(148,811	)	(117,054	)	(11,924	)	(277,789	)
Gross profit	276,733		47,544		11,924		336,201

The Group primarily operates in the PRC, accordingly, no geographical information is presented.

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Share-based Compensation (Details 2) (Share Incentive Plan, Share options, CNY) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Summary of assumptions used to estimate the fair values of options granted
Risk-free interest rate, minimum (as a percent)			1.30%
Risk-free interest rate, maximum (as a percent)			2.25%
Risk-free interest rate (as a percent)	2.70%	2.05%
Exercise multiple	2.80%	2.80%	2.80%
Expected forfeiture rate (as a percent)	5.00%	5.00%	5.00%
Contractual life of option	6 years	6 years	6 years
Expected volatility, minimum (as a percent)			38.00%
Expected volatility, maximum (as a percent)			38.88%
Expected volatility, (as a percent)	45.00%	39.00%
Dividend yield (as a percent)	4.00%	5.00%
Additional information
Fair value of equity awards vested during the period	5,912	9,275	4,246
Unrecognized compensation costs related to non-vested shares	3,717
Expected weighted average period of recognition of unrecognized compensation costs	10 months 21 days
Service conditions
Additional information
Share-based compensation	5,522	8,276	10,891

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Business Combination (Tables)

12 Months Ended

Dec. 31, 2014

Business Combination

Schedule of recognized amounts of the identifiable assets

	As of December 10, 2012
	RMB
Identifiable intangible assets:
Brand name	2,141
Customer relationships	1,637
Source code	933
Identifiable assets acquired	4,711
Goodwill	789
Cash consideration	5,500

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Accrued Expenses and Other Liabilities

12 Months Ended

Dec. 31, 2014

Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities

13.Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:

	As of December 31,
	2013	2014
	RMB	RMB
Accrued salaries and welfare	19,740	17,964
Accrued advertising expenses	2,371	2,388
Accrued network support expenses	1,908	1,801
Business and other tax payable	3,304	4,093
Professional and other service fees	6,556	9,262
Deposits received from matchmaking service agencies	2,850	8,980
Others	5,616	6,652
Balance as at December 31	42,345	51,140
Less: Current portion	39,615	45,490
Non-current portion	2,730	5,650